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**UNITEDSTATES**

**SECURITIES AND EXCHANGE COMMISSION****Washington, D.C. 20549**

 

**Form 10-Q**

 
| x | ** ** | **QUARTERLY REPORT PURSUANT TO SECTION 13 OR  15(d) OF THE SECURITIES EXCHANGE ACT of 1934** |
|---|------------|--------------------------------------------------------------------------------------------------------|

 

**Forthe quarterly period ended June 30, 2009**

 
| **o** | ** ** | **TRANSITION REPORT PURSUANT TO SECTION 13 OR  15(d) OF THE SECURITIES EXCHANGE ACT of 1934** |
|-------|------------|---------------------------------------------------------------------------------------------------------|

 

**For the transition period from                    to                    **

 

**Commission File Number 000-30833**

 

**BRUKER CORPORATION**

(Exact name ofregistrant as specified in its charter)

 

| **Delaware**                                                    | ** ** | **04-3110160**                        |
|-----------------------------------------------------------------|------------|---------------------------------------|
| (State or other jurisdiction of  incorporation or organization) |       | (I.R.S. Employer  Identification No.) |

 

**40 Manning Road, Billerica, MA 01821**(Address of principal executive offices) (Zip Code)

* *

Registrant’s telephone number, including areacode: **(978) 663-3660**

 

Indicateby check mark whether the registrant (1) has filed all reports required tobe filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject tosuch filing requirements for the past 90 days. Yes x  No o

 

Indicateby check mark whether the registrant has submitted electronically and posted onits corporate Web site, if any, every Interactive Data File required to besubmitted and posted pursuant to Rule 405 of Regulation S-T during thepreceding 12 months (or for such shorter period that the registrant wasrequired to submit and post such files). Yes o  No o

 

Indicateby check mark whether the registrant is a large accelerated filer, anaccelerated filer, a non-accelerated filer or a smaller reporting company. Seethe definitions of “accelerated filer, large accelerated filer, smallerreporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

| Large  accelerated filer o                |   | Accelerated  filer x    |
|------------------------------------------------|--------|------------------------------|
|                                           |   |                         |
| Non-accelerated  filer o                  |   | Smaller  reporting company o |
| (Do not check if  a smaller reporting company) |   |                         |

 

Indicateby check mark whether the registrant is a shell company (as defined in Rule 12b-2of the Exchange Act).  Yes o  No x

 

Indicatethe number of shares outstanding of each of the issuer’s classes of commonstock, as of the latest practicable date.

 
| **Class**                                | ** ** | **Outstanding at August 3, 2009** |
|------------------------------------------|------------|----------------------------------------|
| Common Stock,  $0.01 par value per share |       | 164,087,910  shares                    |

 

 

 

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**BRUKER CORPORATION**

 

**Quarterly Report on Form 10-Q**

**Forthe Quarter Ended June 30, 2009**

 

**Index**

 
| ** **       | ** ** | ** **                                                                                                                | **Page** |
|------------------|------------|---------------------------------------------------------------------------------------------------------------------------|----------|
| **Part I**  | ** ** | **FINANCIAL  INFORMATION**                                                                                                | 1        |
| Item 1:          |       | Unaudited  Condensed Consolidated Financial Statements                                                                    | 1        |
|             |       | Unaudited Condensed Consolidated Balance Sheets as of  June 30, 2009 and December 31, 2008                      | 1        |
|             |       | Unaudited Condensed Consolidated Statements of  Operations for the three and six months ended June 30, 2009 and 2008 | 2        |
|             |       | Unaudited Condensed Consolidated Statements of Cash  Flows for the six months ended June 30, 2009 and 2008           | 3        |
|             |       | Notes to Unaudited Condensed Consolidated Financial  Statements                                                           | 4        |
| Item 2:          |       | Management’s Discussion and Analysis  of Financial Condition and Results of Operations                               | 19       |
| Item 3:          |       | Quantitative and Qualitative  Disclosures About Market Risk                                                               | 35       |
| Item 4:          |       | Controls and Procedures                                                                                                   | 36       |
| **Part II** | ** ** | **OTHER INFORMATION**                                                                                                     | 37       |
| Item 1:          |       | Legal Proceedings                                                                                                         | 37       |
| Item 1A:         |       | Risk Factors                                                                                                              | 37       |
| Item 2:          |       | Unregistered Sales of Equity  Securities and Use of Proceeds                                                              | 38       |
| Item 3:          |       | Defaults Upon Senior Securities                                                                                           | 38       |
| Item 4:          |       | Submission of Matters to a Vote of  Security Holders                                                                      | 38       |
| Item 5:          |       | Other Information                                                                                                         | 39       |
| Item 6:          |       | Exhibits                                                                                                                  | 39       |
|             |       | Signatures                                                                                                                | 40       |

 

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**PART I                  FINANCIALINFORMATION**

 

**ITEM 1.                  UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

 

**BRUKER CORPORATION**

**UNAUDITED CONDENSED CONSOLIDATEDBALANCE SHEETS**

**(inmillions, except share data)**

 
| ** **                                                                                                                                                                                                 | ** ** | **June 30,  2009** | ** ** | **December 31,  2008** | ** ** |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------|------------|------------------------|------------|
| **ASSETS**                                                                                                                                                                                                 |       |               |       |                   |       |
| Current assets:                                                                                                                                                                                            |       |               |       |                   |       |
| Cash and cash  equivalents                                                                                                                                                                                 |       | $                  | 152.6      |                   | $          | 166.2 |   |
| Restricted cash                                                                                                                                                                                            |       | 1.7                |       | 1.5                    |       |
| Accounts  receivable, net                                                                                                                                                                                  |       | 132.9              |       | 171.9                  |       |
| Inventories                                                                                                                                                                                                |       | 436.4              |       | 425.1                  |       |
| Other current  assets                                                                                                                                                                                      |       | 65.6               |       | 56.0                   |       |
| Total current  assets                                                                                                                                                                                      |       | 789.2              |       | 820.7                  |       |
|                                                                                                                                                                                                       |       |               |       |                   |       |
| Property, plant  and equipment, net                                                                                                                                                                        |       | 221.3              |       | 221.3                  |       |
| Intangibles and  other long-term assets                                                                                                                                                                    |       | 77.0               |       | 74.3                   |       |
| Total assets                                                                                                                                                                                               |       | $                  | 1,087.5    |                   | $          | 1,116.3 |   |
|                                                                                                                                                                                                       |       |               |       |                   |       |
| **LIABILITIES AND SHAREHOLDERS'  EQUITY**                                                                                                                                                                  |       |               |       |                   |       |
| Current  liabilities:                                                                                                                                                                                      |       |               |       |                   |       |
| Short-term  borrowings                                                                                                                                                                                     |       | $                  | 0.6        |                   | $          | 22.7 |   |
| Current portion  of long-term debt                                                                                                                                                                         |       | 42.5               |       | 18.3                   |       |
| Accounts payable                                                                                                                                                                                           |       | 40.8               |       | 43.3                   |       |
| Customer  advances                                                                                                                                                                                         |       | 202.1              |       | 199.6                  |       |
| Other current  liabilities                                                                                                                                                                                 |       | 233.2              |       | 235.8                  |       |
| Total current  liabilities                                                                                                                                                                                 |       | 519.2              |       | 519.7                  |       |
|                                                                                                                                                                                                       |       |               |       |                   |       |
| Long-term debt                                                                                                                                                                                             |       | 127.6              |       | 182.8                  |       |
| Other long-term  liabilities                                                                                                                                                                               |       | 104.2              |       | 101.1                  |       |
| Commitments and  contingencies (Note 18)                                                                                                                                                                   |       |               |       |                   |       |
|                                                                                                                                                                                                       |       |               |       |                   |       |
| Shareholders'  equity:                                                                                                                                                                                     |       |               |       |                   |       |
| Preferred stock,  $0.01 par value 5,000,000 shares authorized, none issued or outstanding at  June 30, 2009 and December 31, 2008                                                                          |       | —             |       | —                 |       |
| Common stock,  $0.01 par value 260,000,000 shares authorized, 164,100,858 and 164,078,721  shares issued and 164,087,903 and 164,068,252 outstanding at June 30, 2009  and December 31, 2008, respectively |       | 1.6                |       | 1.6                    |       |
| Treasury stock  at cost, 12,955 and 10,469 at June 30, 2009 and December 31, 2008,  respectively                                                                                                           |       | (0.1               | )          | (0.1                   | )          |
| Other  shareholders' equity                                                                                                                                                                                |       | 333.8              |       | 310.4                  |       |
| Total  shareholders' equity                                                                                                                                                                                |       | 335.3              |       | 311.9                  |       |
| Noncontrolling  interest in subsidiaries                                                                                                                                                                   |       | 1.2                |       | 0.8                    |       |
| Total  shareholders' equity of Bruker Corporation                                                                                                                                                          |       | 336.5              |       | 312.7                  |       |
| Total  liabilities and shareholders' equity                                                                                                                                                                |       | $                  | 1,087.5    |                   | $          | 1,116.3 |   |

 

*The accompanying notes are an integral part ofthese statements.*

 

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**BRUKER CORPORATION**

**UNAUDITED CONDENSED CONSOLIDATEDSTATEMENTS OF OPERATIONS**

**(inmillions, except per share data)**

 
| ** **                                                                                   | ** ** | **Three Months Ended  June 30,** | ** ** | **Six Months Ended  June 30,** | ** ** |
|----------------------------------------------------------------------------------------------|------------|----------------------------------|------------|--------------------------------|------------|
| ** **                                                                                   | ** ** | **2009**                         | ** ** | **2008**                       | ** ** | **2009** | ** ** | **2008** | ** ** |
| Product revenue                                                                              |       | $                                | 222.9      |                           | $          | 280.3 |   | $ | 425.1 |   | $ | 488.6 |   |
| Service revenue                                                                              |       | 28.3                             |       | 30.2                           |       | 55.2 |   | 58.9 |   |
| Other revenue                                                                                |       | 1.3                              |       | 1.0                            |       | 2.7 |   | 2.3 |   |
| Total revenue                                                                                |       | 252.5                            |       | 311.5                          |       | 483.0 |   | 549.8 |   |
|                                                                                         |       |                             |       |                           |       |   |   |   |   |
| Cost of product  revenue                                                                     |       | 125.2                            |       | 162.5                          |       | 236.9 |   | 267.7 |   |
| Cost of service  revenue                                                                     |       | 16.1                             |       | 19.4                           |       | 32.2 |   | 38.5 |   |
| Total cost of  revenue                                                                       |       | 141.3                            |       | 181.9                          |       | 269.1 |   | 306.2 |   |
| Gross profit                                                                                 |       | 111.2                            |       | 129.6                          |       | 213.9 |   | 243.6 |   |
|                                                                                         |       |                             |       |                           |       |   |   |   |   |
| Operating  expenses:                                                                         |       |                             |       |                           |       |   |   |   |   |
| Sales and  marketing                                                                         |       | 43.9                             |       | 47.1                           |       | 86.5 |   | 91.5 |   |
| General and  administrative                                                                  |       | 17.0                             |       | 17.2                           |       | 33.3 |   | 34.0 |   |
| Research and  development                                                                    |       | 31.1                             |       | 36.5                           |       | 60.2 |   | 67.7 |   |
| Acquisition-related  charges (credits), net                                                  |       | (1.0                             | )          | 0.4                            |       | (0.6 | ) | 6.2 |   |
| Total operating  expenses                                                                    |       | 91.0                             |       | 101.2                          |       | 179.4 |   | 199.4 |   |
| Operating income                                                                             |       | 20.2                             |       | 28.4                           |       | 34.5 |   | 44.2 |   |
|                                                                                         |       |                             |       |                           |       |   |   |   |   |
| Interest and  other income (expense), net                                                    |       | (2.9                             | )          | 3.6                            |       | (2.8 | ) | (8.6 | ) |
| Income before  income tax provision and noncontrolling interest in consolidated subsidiaries |       | 17.3                             |       | 32.0                           |       | 31.7 |   | 35.6 |   |
| Income tax  provision                                                                        |       | 4.6                              |       | 10.3                           |       | 10.4 |   | 14.5 |   |
| Consolidated net  income                                                                     |       | 12.7                             |       | 21.7                           |       | 21.3 |   | 21.1 |   |
| Less: net income  (loss) attributable to noncontrolling interests                            |       | (0.2                             | )          | —                         |       | — |   | 0.2 |   |
| Net income  attributable to Bruker Corporation                                               |       | $                                | 12.9       |                           | $          | 21.7 |   | $ | 21.3 |   | $ | 20.9 |   |
|                                                                                         |       |                             |       |                           |       |   |   |   |   |
| Net income per  common share attributable to                                                 |       |                             |       |                           |       |   |   |   |   |
| Bruker  Corporation shareholders - basic and diluted                                         |       | $                                | 0.08       |                           | $          | 0.13 |   | $ | 0.13 |   | $ | 0.13 |   |
|                                                                                         |       |                             |       |                           |       |   |   |   |   |
| Weighted average  common shares outstanding:                                                 |       |                             |       |                           |       |   |   |   |   |
| Basic                                                                                        |       | 163.3                            |       | 162.4                          |       | 163.3 |   | 162.4 |   |
| Diluted                                                                                      |       | 164.7                            |       | 165.5                          |       | 164.5 |   | 165.3 |   |

 

*The accompanying notes are an integral part ofthese statements.*

 

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**BRUKER CORPORATION**

**UNAUDITED CONDENSED CONSOLIDATEDSTATEMENTS OF CASH FLOWS**

**(inmillions)**

 
| ** **                                                                    | ** ** | **Six Months Ended  June 30,** | ** ** |
|-------------------------------------------------------------------------------|------------|--------------------------------|------------|
| ** **                                                                    | ** ** | **2009**                       | ** ** | **2008** | ** ** |
| Cash flows from  operating activities:                                        |       |                           |       |   |   |
| Consolidated net  income                                                      |       | $                              | 21.3       |   | $ | 21.1 |   |
| Adjustments to  reconcile net income to cash flows from operating activities: |       |                           |       |   |   |
| Depreciation and  amortization                                                |       | 13.8                           |       | 14.5 |   |
| Stock-based  compensation                                                     |       | 3.3                            |       | 1.8 |   |
| Gain on  acquisition                                                          |       | (2.1                           | )          | — |   |
| Other non-cash  income                                                        |       | (2.8                           | )          | (4.6 | ) |
| Changes in  operating assets and liabilities:                                 |       |                           |       |   |   |
| Accounts  receivable                                                          |       | 40.3                           |       | 41.2 |   |
| Inventories                                                                   |       | (4.5                           | )          | (6.9 | ) |
| Accounts payable                                                              |       | (2.3                           | )          | (13.0 | ) |
| Customer  advances                                                            |       | (4.7                           | )          | (25.6 | ) |
| Other changes in  operating assets and liabilities, net                       |       | (11.0                          | )          | (10.4 | ) |
| Net cash  provided by operating activities                                    |       | 51.3                           |       | 18.1 |   |
|                                                                          |       |                           |       |   |   |
| Cash flows from  investing activities:                                        |       |                           |       |   |   |
| Purchases of  property, plant and equipment                                   |       | (7.1                           | )          | (27.1 | ) |
| Redemption of  short-term investments                                         |       | —                         |       | 9.8 |   |
| Acquisitions,  net of cash acquired                                           |       | (1.1                           | )          | (2.1 | ) |
| Payments in  connection with the acquisition of Bruker BioSpin                |       | —                         |       | (5.2 | ) |
| Changes in  restricted cash                                                   |       | (0.5                           | )          | (3.4 | ) |
| Net cash used in  investing activities                                        |       | (8.7                           | )          | (28.0 | ) |
|                                                                          |       |                           |       |   |   |
| Cash flows from  financing activities:                                        |       |                           |       |   |   |
| Proceeds from  (repayments of) short-term borrowings, net                     |       | (35.8                          | )          | 33.4 |   |
| Proceeds from  (repayments of) long-term debt, net                            |       | (15.9                          | )          | 160.0 |   |
| Payment of  deferred financing costs                                          |       | —                         |       | (2.9 | ) |
| Proceeds from  issuance of common stock, net of repurchases                   |       | 0.1                            |       | 1.4 |   |
| Deemed dividend  in connection with the acquisition of Bruker BioSpin         |       | —                         |       | (386.0 | ) |
| Cash payments to  shareholders                                                |       | —                         |       | (23.4 | ) |
| Net cash used in  financing activities                                        |       | (51.6                          | )          | (217.5 | ) |
|                                                                          |       |                           |       |   |   |
| Effect of  exchange rate changes on cash and cash equivalents                 |       | (4.6                           | )          | 20.4 |   |
| Net change in  cash and cash equivalents                                      |       | (13.6                          | )          | (207.0 | ) |
| Cash and cash  equivalents at beginning of period                             |       | 166.2                          |       | 332.4 |   |
| Cash and cash  equivalents at end of period                                   |       | $                              | 152.6      |   | $ | 125.4 |   |

 

*The accompanying notes are an integral part ofthese statements.*

 

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**BRUKER CORPORATION**

**NOTES TO UNAUDITED CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS**

 

**1.****             ****Description of Business**

 

Bruker Corporation andits wholly-owned subsidiaries (the “Company”) design, manufacture, service andmarket proprietary life science and materials research systems based on itscore technology platforms, including X-ray technologies, magnetic resonancetechnologies, mass spectrometry technologies, optical emission spectroscopy andinfrared and Raman molecular spectroscopy technologies. The Company also sellsa broad range of field analytical systems for chemical, biological,radiological and nuclear detection, as well as superconducting wire productsand devices. The Company maintains major technical and manufacturing centers inEurope, North America and Japan and sales offices throughout the world. TheCompany’s diverse customer base includes pharmaceutical, biotechnology andproteomics companies, academic institutions, advanced materials andsemiconductor industries and government agencies.

 

The financial statementsrepresent the consolidated accounts of the Company. All significantintercompany accounts and transactions have been eliminated in consolidation.The condensed consolidated financial statements as of and for the three and sixmonths ended June 30, 2009 and 2008 have been prepared in accordance withaccounting principles generally accepted in the United States (“GAAP”) forinterim financial information and pursuant to the rules and regulations ofthe Securities and Exchange Commission for Quarterly Reports on Form 10-Qand Article 10 of Regulation S-X. Accordingly, the financial informationpresented herein does not include all of the information and footnotes requiredby GAAP for complete financial statements. In the opinion of management, alladjustments, consisting only of normal recurring adjustments, considerednecessary for a fair presentation have been included. The results for interimperiods are not necessarily indicative of the results expected for the fullyear. Certain prior year amounts have been reclassified to conform to thecurrent year presentation. These reclassifications had no effect on previouslyreported net income or shareholders’ equity.

 

In February 2008,the Company completed the acquisition of the Bruker BioSpin Group (“BrukerBioSpin”). Both the Company and Bruker BioSpin were majority owned by sixaffiliated shareholders prior to the acquisition. As a result, the acquisitionof Bruker BioSpin was considered a business combination of companies undercommon control and was accounted for at historical carrying values at the dateof the acquisition. The unaudited condensed consolidated balance sheets,statements of operations, statements of cash flows and notes to theconsolidated financial statements for all periods presented herein have beenrestated by combining the historical consolidated financial statements of theCompany with those of Bruker BioSpin. Additionally, because this transactionwas accounted for as a business combination of entities under common control,all one-time transaction costs were expensed as incurred.

 

In the second quarter of2009, the Company reevaluated its reporting segments following the acquisitionof a business engaged in developing and manufacturing superconducting devicesand other advanced technologies for alternative energy research. As a result ofthe acquisition and the corresponding changes in the Company’s organizationalstructure, management will report results on the basis of the following twosegments:

 

·                  *Scientific Instruments.*The operations ofthis segment include the design, manufacture and distribution of advancedinstrumentation and automated solutions based on X-ray technology, spark-OEStechnology, magnetic resonance technology, mass spectrometry technology andinfrared and Raman molecular spectroscopy technology. Typical customers of theScientific Instruments segment include pharmaceutical, biotechnology,proteomics and molecular diagnostic companies, academic institutions,government agencies, semiconductor companies, chemical, cement, metals andpetroleum companies, raw material manufacturers and food, beverage andagricultural companies.

 

·                  *Energy and Supercon Technologies**.* The operations of this segment includedevelopment and production of low temperature superconductor and hightemperature superconductor wires for use in advanced magnet technology andenergy applications as well as electron and ion linear accelerators,superconducting and 

 

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normal conductingaccelerator cavities, insertion devices, superconducting fault currentlimiters, crystal growth magnets and other accelerator components for physicsand energy research and a variety of other scientific applications.

 

Management has evaluatedsubsequent events through August 10, 2009, the date the financialstatements were filed with the Securities and Exchange Commission (“SEC”) and determinedthat there were none requiring disclosure.

 

**2.****             ****Acquisition of Bruker BioSpin**

 

On February 26,2008, the Company completed the acquisition of all of the outstanding capitalstock of Bruker BioSpin in accordance with the terms of various stock purchaseagreements dated as of December 2, 2007. The acquisition of Bruker BioSpinrepresented a combination of companies under common control due to the majorityownership of both companies by six related individuals as an affiliatedshareholder group. As a result, the acquisition of Bruker BioSpin was accountedfor at historical carrying values. The technologies of Bruker BioSpin arecomplementary to the Company’s accurate-mass electrospray time-of-flight massspectrometers and single-crystal diffraction X-ray spectrometers and havecreated revenue synergies and provided opportunities to supply customers withequipment packages that have a broader range of applications and value. Theaddition of Bruker BioSpin has also enhanced the Company’s worldwidedistribution and sales and service infrastructure.

 

At the completion of thisacquisition, the Company paid an aggregate of $914.0 million ofconsideration to the shareholders of Bruker BioSpin, which was financed with57,544,872 shares of unregistered common stock valued at $526.0 million,$351.0 million of cash obtained under a new credit facility and thebalance with cash on hand. The value of the shares of common stock issued inconnection with the merger was determined using a trailing average of theclosing market prices of the Company’s stock for a period of ten consecutivetrading days ending two days prior to the signing of the various stock purchaseagreements.

 

Under the stock purchaseagreements, $98.8 million of the purchase price was paid into escrowaccounts pending the resolution of indemnification obligations and workingcapital obligations of the sellers. In May 2008, $6.8 million of theescrow was released following the receipt of combined audited financialstatements of Bruker BioSpin for the year ended December 31, 2007. In April 2009,the remaining $92.0 million of the escrow was released following thereceipt of audited financial statements of the Company, including BrukerBioSpin, for the year ended December 31, 2008.

 

**3.****             ****Other Acquisitions**

 

In April 2009, theCompany acquired substantially all of the assets of the research instrumentsportion of ACCEL Instruments GmbH (the “RI business”) from Varian MedicalSystems, Inc. The acquisition of the RI business was accounted for underthe acquisition method in accordance with Financial Accounting Standards Board(“FASB”) Statement of Financial Accounting Standard (“SFAS”) No. 141(R), *Business Combinations*. The RI business, located in BergischGladbach, Germany, consists of the development and manufacture of electron andion linear accelerators, superconducting and normal conducting acceleratorcavities, insertion devices, superconducting fault current limiters, otheraccelerator components and specialty superconducting magnets for physics andenergy research and a variety of other scientific applications. The results ofthe RI business have been included in the Energy and Supercon Technologiessegment from the date of acquisition. The consideration transferred inacquiring the RI business was approximately $0.4 million and consisted entirelyof cash. The Company acquired approximately $1.6 million of receivables, $4.4million of inventory, $2.9 million of other current assets and $4.9 million ofproperty, plant and equipment in this acquisition and assumed approximately$11.3 million of current liabilities. In connection with the acquisition of theRI business, the Company recorded a gain of approximately $2.1 million that hasbeen recorded as a component of acquisition-related costs in the unauditedcondensed consolidated statements of operations. Pro forma financialinformation reflecting the acquisition of the RI business has not beenpresented because the impact on revenues, net income and net income per commonshare attributable to Bruker Corporation shareholders is not material.

 

In August 2008, theCompany acquired S.I.S. Surface Imaging Systems GmbH (“S.I.S.”), aprivately-held company located in Herzogenrath, Germany. The acquisition ofS.I.S. was accounted for under the purchase method in accordance with SFAS No. 141,*Business Combinations*. S.I.S. develops,manufactures and distributes advanced atomic force/scanning probe microscopyfor applications in materials research, including semiconductors, data storage,electronic materials, solar cells, polymers and catalysts. The results ofS.I.S. have been included in the 

 

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Scientific Instrumentssegment from the date of acquisition. The aggregate purchase price of S.I.S.was $2.1 million. In addition, the Company issued an aggregate of 59,342restricted unregistered shares of the Company’s common stock, par value $0.01per share, to certain S.I.S. shareholders. These shares were not included inthe purchase price because of contingencies related to the continuingemployment of the shareholders and, accordingly, are being recorded ascompensation expense. The Company recorded $2.1 million of goodwill inconnection with the acquisition of S.I.S. and assigned the goodwill to theScientific Instruments segment. Pro forma financial information reflecting theacquisition of S.I.S. has not been presented because the impact on revenues,net income and net income per common share attributable to Bruker Corporationshareholders was not material.

 

In January 2008, theCompany acquired JUWE Laborgeraete GmbH (“JUWE”), a privately-held companylocated in Viersen, Germany. The acquisition of JUWE was accounted for underthe purchase method in accordance with SFAS No. 141. JUWE develops,manufactures and distributes advanced combustion analysis systems for variouscarbon, hydrogen, nitrogen, oxygen and sulfur elemental applications. JUWE’sproducts are complementary to the Company’s optical emission spectroscopyproducts. The results of JUWE have been included in the Scientific Instrumentssegment from the date of acquisition. The aggregate purchase price of JUWE was$1.6 million, of which $1.2 million was paid in cash and$0.4 million consisted of net liabilities assumed by the Company. Inaddition, the Company issued an aggregate of 111,000 restricted unregisteredshares of the Company’s common stock, par value $0.01 per share, to JUWE’sshareholders. These shares were not included in the purchase price because ofcontingencies related to the continuing employment of the shareholders and,accordingly, are being recorded as compensation expense. The Company recorded$1.1 million of goodwill in connection with the acquisition of JUWE andassigned the goodwill to the Scientific Instruments segment. Pro formafinancial information reflecting the acquisition of JUWE has not been presentedbecause the impact on revenues, net income and net income per common shareattributable to Bruker Corporation shareholders was not material.

 

**4.****             ****Stock-Based Compensation**

 

In 2000, the Board ofDirectors adopted and the shareholders approved the 2000 Stock Option Plan. The2000 Stock Option Plan provides for the issuance of up to 2,188,000 shares ofcommon stock in connection with awards under the Plan. The 2000 Stock OptionPlan allows a committee of the Board of Directors (the “Committee”) to grantincentive stock options, non-qualified stock options, stock appreciation rightsand stock awards (including the use of restricted stock and phantom shares).The Committee has the authority to determine which employees will receive the awards,the amount of the awards and other terms and conditions of the awards. In 2003,the Company’s shareholders approved an amendment and restatement of the 2000Stock Option Plan to change the plan name to the Bruker BioSciences CorporationAmended and Restated 2000 Stock Option Plan and to increase the number ofshares by 4,132,000 shares. In 2006, the Company’s shareholders approved anamendment and restatement of the Bruker BioSciences Corporation Amended andRestated 2000 Stock Option Plan to increase the number of shares available by1,680,000 shares. In February 2008, the Company’s shareholders approvedanother amendment and restatement of the Bruker BioSciences Corporation Amendedand Restated 2000 Stock Option Plan to increase the number of shares availableby 2,000,000 shares, to a total of 10,000,000 shares.

 

As of June 30, 2009,the Company’s primary types of share-based compensation were in the form ofstock options and restricted stock. The Company recorded stock-basedcompensation expense for the three and six months ended June 30, 2009 and June 30,2008 as follows (in millions):

 
| ** **                                  | ** ** | **Three Months Ended June 30,** | ** ** | **Six Months Ended June 30,** | ** ** |
|---------------------------------------------|------------|---------------------------------|------------|-------------------------------|------------|
| ** **                                  | ** ** | **2009**                        | ** ** | **2008**                      | ** ** | **2009** | ** ** | **2008** | ** ** |
| Stock options                               |       | $                               | 1.2        |                          | $          | 1.0 |   | $ | 2.5 |   | $ | 1.5 |   |
| Restricted stock                            |       | 0.3                             |       | 0.1                           |       | 0.8 |   | 0.3 |   |
| Total  stock-based compensation, pre-tax    |       | 1.5                             |       | 1.1                           |       | 3.3 |   | 1.8 |   |
| Tax benefit                                 |       | 0.2                             |       | 0.2                           |       | 0.6 |   | 0.4 |   |
| Total  stock-based compensation, net of tax |       | $                               | 1.3        |                          | $          | 0.9 |   | $ | 2.7 |   | $ | 1.4 |   |

 

Compensation expense isamortized on a straight-line basis over the underlying vesting terms. Stockoptions of the Company’s common stock are periodically awarded to executiveofficers and other employees of the Company subject to a vesting period ofthree to five years. The fair value of each option award is estimated on thedate of grant using the Black-Scholes option-pricing model. Assumptionsregarding volatility, expected life, dividend yield 

 

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and risk-free interestrate are required for the Black-Scholes model and are presented in the tablebelow:

 
| ** **               | ** ** | **2009**   | ** ** | **2008**   | ** ** |
|--------------------------|------------|------------|------------|------------|------------|
| Risk-free  interest rate |       | 1.71%-3.60 | %          | 2.71%-3.95 | %          |
| Expected life            |       | 6.5 years  |       | 6.5 years  |       |
| Volatility               |       | 64.0       | %          | 72.0       | %          |
| Expected  dividend yield |       | 0.0        | %          | 0.0        | %          |

 

Risk-free interest rateis the yield on zero-coupon U.S. Treasury securities for a period that iscommensurate with the expected life assumption. Expected life is determinedthrough the simplified method as defined in the Securities and ExchangeCommission Staff Accounting Bulletin No. 110. The Company believes thatthis is the best estimate of the expected life of a new option. Expectedvolatility is based on a number of factors. The Company currently believes thatthe exclusive use of historical volatility results in the best estimate of thegrant-date fair value of employee stock options because it reflects the market’scurrent expectations of future volatility. Expected dividend yield was notconsidered in the option pricing formula since the Company does not paydividends and has no current plans to do so in the future. The terms of some ofthe Company’s indebtedness also currently restricts its ability to paydividends to its shareholders.

 

Stock option activity forthe six months ended June 30, 2009 was as follows:

 
| ** **                                    | ** ** | **Shares Subject  to Options** | ** ** | **Weighted  Average  Option Price** | ** ** | **Weighted  Average  Remaining  Contractual  Term (Yrs)** | ** ** | **Aggregate  Intrinsic Value  ($'s in millions)** | ** ** |
|-----------------------------------------------|------------|--------------------------------|------------|-------------------------------------|------------|-----------------------------------------------------------|------------|---------------------------------------------------|------------|
| Outstanding at  December 31, 2008             |       | 5,268,523                      |       | $                                   | 8.56       |                                                      |       |                                              |       |   |
| Granted                                       |       | 48,000                         |       | 4.13                                |       |                                                      |       |                                              |       |
| Exercised                                     |       | (22,335                        | )          | 4.77                                |       |                                                      |       |                                              |       |
| Forfeited                                     |       | (55,641                        | )          | 9.31                                |       |                                                      |       |                                              |       |
| Outstanding at  June 30, 2009                 |       | 5,238,547                      |       | $                                   | 8.53       |                                                      | 3.9        |                                              | $          | 10.4 |   |
|                                          |       |                           |       |                                |       |                                                      |       |                                              |       |
| Exercisable at  June 30, 2009                 |       | 2,670,614                      |       | $                                   | 7.54       |                                                      | 3.9        |                                              | $          | 7.6 |   |
|                                          |       |                           |       |                                |       |                                                      |       |                                              |       |
| Vested and  expected to vest at June 30, 2009 |       | 5,089,607                      |       | $                                   | 8.50       |                                                      | 3.9        |                                              | $          | 10.3 |   |

 

Unrecognized pre-tax stock-basedcompensation expense of $14.9 million related to stock option awards isexpected to be recognized over the weighted average remaining service period of2.8 years for stock options outstanding at June 30, 2009. Theintrinsic values above are based on the Company’s closing stock price of $9.26on June 30, 2009.

 

Restricted shares of theCompany’s common stock are periodically awarded to executive officers,directors and certain key employees of the Company, subject to servicerestrictions, which expire ratably over periods of three to five years. Therestricted shares of common stock may not be sold or transferred during therestriction period. Stock compensation for restricted stock is recorded basedon the stock price on the grant date and charged to expense ratably through therestriction period. The following table summarizes information about restrictedstock activity during the six months ended June 30, 2009:

 

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| ** **                        | ** ** | **Shares Subject  to Restriction** | ** ** | **Weighted  Average Grant  Date Fair  Value** | ** ** |
|-----------------------------------|------------|------------------------------------|------------|-----------------------------------------------|------------|
| Outstanding at  December 31, 2008 |       | 591,675                            |       | $                                             | 7.26       |   |
| Granted                           |       | —                             |       | —                                        |       |
| Vested                            |       | (51,175                            | )          | 7.60                                          |       |
| Forfeited                         |       | (940                               | )          | 5.00                                          |       |
| Outstanding at  June 30, 2009     |       | 539,560                            |       | $                                             | 7.23       |   |

 

Unrecognized pre-tax stock-basedcompensation expense of $3.1 million related to restricted stock awards isexpected to be recognized over the weighted average remaining service period of1.9 years for restricted stock awards outstanding at June 30, 2009.

 

**5.****             ****Earnings Per Share**

 

Net income per share iscalculated by dividing net income by the weighted-average shares outstandingduring the period. The diluted net income per share computation includes theeffect of shares, which would be issuable upon the exercise of outstandingstock options and the vesting of restricted stock, reduced by the number ofshares, which are assumed to be purchased by the Company from the resultingproceeds at the average market price during the period.

 

The following table setsforth the computation of basic and diluted average shares outstanding for thethree and six months ended June 30, 2009 and 2008 (in millions):

 
| ** **                                                                                        | ** ** | **Three Months Ended June 30,** | ** ** | **Six Months Ended June 30,** | ** ** |
|---------------------------------------------------------------------------------------------------|------------|---------------------------------|------------|-------------------------------|------------|
| ** **                                                                                        | ** ** | **2009**                        | ** ** | **2008**                      | ** ** | **2009** | ** ** | **2008** | ** ** |
| Net income  attributable to Bruker****Corporation,  as reported                                   | ** ** | $                               | 12.9       | ** **                    | $          | 21.7 | ** ** | $ | 21.3 | ** ** | $ | 20.9 | ** ** |
|                                                                                              |       |                            |       |                          |       |   |   |   |   |
| Weighted average  shares outstanding:                                                             |       |                            |       |                          |       |   |   |   |   |
| Weighted average  shares outstanding-basic                                                        |       | 163.3                           |       | 162.4                         |       | 163.3 |   | 162.4 |   |
| Effect of  dilutive securities:                                                                   |       |                            |       |                          |       |   |   |   |   |
| Stock options  and restricted stock                                                               |       | 1.4                             |       | 3.1                           |       | 1.2 |   | 2.9 |   |
| Weighted average  shares outstanding - diluted                                                    |       | 164.7                           |       | 165.5                         |       | 164.5 |   | 165.3 |   |
|                                                                                              |       |                            |       |                          |       |   |   |   |   |
| Net income per  common share attributable to Bruker Corporation shareholders - basic and  diluted |       | $                               | 0.08       |                          | $          | 0.13 |   | $ | 0.13 |   | $ | 0.13 |   |

 

Stock options to purchaseapproximately 3.3 million shares and 0.4 million shares were excluded from thecomputation of diluted earnings per share in the three months ended June 30,2009 and June 30, 2008, respectively, and approximately 3.5 million sharesand 0.3 million shares were excluded from the computation of diluted earningsper share in the six months ended June 30, 2009 and June 30, 2008,respectively, because the exercise price of the stock options exceeded theaverage market price of the Company’s common stock and, as a result, would havehad an anti-dilutive effect.

 

**6.****             ****Fair Value of FinancialInstruments**

 

The Company follows SFAS No. 157,*Fair Value Measurements*, whichestablishes a three-level valuation hierarchy for measuring fair value andexpands financial statement disclosures about fair value measurements. Thevaluation hierarchy is based upon the transparency of inputs to the valuationof an asset or liability as of the measurement date. A financial instrument’scharacterization within the valuation hierarchy is based upon the lowest levelof input that is significant to the fair value measurement. The three levelsare defined as follows:

 

*Level 1:*    Inputs to thevaluation methodology are quoted prices (unadjusted) for identical assets orliabilities in 

 

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active markets.

 

*Level 2:*    Inputs to thevaluation methodology include quoted prices for similar assets and liabilitiesin active markets, and inputs that are observable for the asset or liability,either directly or indirectly, for substantially the full term of the financialinstrument.

 

*Level 3:*    Inputs to thevaluation methodology are unobservable and significant to the fair valuemeasurement.

 

The Company measures thefollowing financial assets and liabilities at fair value on a recurring basis.The fair value of these financial assets and liabilities was determined usingthe following inputs at June 30, 2009 (in millions):

 
| ** **                                               | ** ** | **Total** | ** ** | **Quoted Prices in  Active Markets  Available (Level 1)** | ** ** | **Significant Other  Observable  Inputs (Level 2)** | ** ** | **Significant  Unobservable  Inputs (Level 3)** | ** ** |
|----------------------------------------------------------|------------|-----------|------------|-----------------------------------------------------------|------------|-----------------------------------------------------|------------|-------------------------------------------------|------------|
| Assets:                                                  |       |      |       |                                                      |       |                                                |       |                                            |       |
| Cash equivalents                                         |       | $         | 59.3       |                                                      | $          | 59.3                                                |       | $                                               | —     |   | $ | — |   |
| Restricted cash                                          |       | 1.7       |       | 1.7                                                       |       | —                                              |       | —                                          |       |
| Long-term  restricted cash                               |       | 2.1       |       | 2.1                                                       |       | —                                              |       | —                                          |       |
| Total assets  recorded at fair value                     |       | $         | 63.1       |                                                      | $          | 63.1                                                |       | $                                               | —     |   | $ | — |   |
|                                                     |       |      |       |                                                      |       |                                                |       |                                            |       |
| Liabilities:                                             |       |      |       |                                                      |       |                                                |       |                                            |       |
| Interest rate  swap                                      |       | $         | 3.7        |                                                      | $          | —                                              |       | $                                               | 3.7        |   | $ | — |   |
| Embedded  derivatives in purchase and delivery contracts |       | 1.6       |       | —                                                    |       | 1.6                                                 |       | —                                          |       |
| Total  liabilities recorded at fair value                |       | $         | 5.3        |                                                      | $          | —                                              |       | $                                               | 5.3        |   | $ | — |   |

 

The Company’s financialinstruments consist primarily of cash equivalents, restricted cash, accountsreceivable, short-term borrowings, accounts payable and long-term debt. Thecarrying amounts of the Company’s cash equivalents, restricted cash, accountsreceivable, short-term borrowings and accounts payable approximate fair valuedue to their short-term nature. The Company’s long-term debt consists primarilyof variable rate arrangements with interest rates that reset every three monthsand, as a result, reflect current interest rates. Consequently, the carryingvalue of the Company’s long-term debt approximates fair value.

 

**7.****             ****Inventories**

 

Inventories consisted ofthe following as of June 30, 2009 and December 31, 2008 (inmillions):

 
| ** **           | ** ** | **June 30, 2009** | ** ** | **December 31,  2008** | ** ** |
|----------------------|------------|-------------------|------------|------------------------|------------|
| Raw materials        |       | $                 | 121.4      |                   | $          | 115.8 |   |
| Work-in-process      |       | 136.2             |       | 129.6                  |       |
| Demonstration  units |       | 40.1              |       | 36.7                   |       |
| Finished goods       |       | 138.7             |       | 143.0                  |       |
| Inventories          |       | $                 | 436.4      |                   | $          | 425.1 |   |

 

The Company reduces thecarrying value of its demonstration inventories for differences between itscost and estimated net realizable value through a charge to cost of revenuethat is based on a number of factors including, the age of the unit, thephysical condition of the unit and an assessment of technological obsolescence.Amounts recorded in cost of product revenue related to the write-down ofdemonstration units to net realizable value were $6.1 million and$6.4 million for the three months ended June 30, 2009 and 2008,respectively, and $11.9 million and $12.7 million for the six monthsended June 30, 2009 and 2008, respectively.

 

Finished goods includein-transit systems that have been shipped to the Company’s customers but notyet installed and accepted by the customer. As of June 30, 2009 and December 31,2008, inventory-in-transit was $85.2 million and $91.6 million, respectively.

 

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**8.****             ****Goodwill and Other IntangibleAssets**

 

The following table setsforth the changes in the carrying amount of goodwill as of June 30, 2009(in millions):

 
| Balance at  December 31, 2008        |   | $   | 46.4   |   |
|--------------------------------------|--------|-----|--------|--------|
| Goodwill  acquired during the period |   | 0.3 |   |
| Foreign currency  impact             |   | 0.2 |   |
| Balance at June  30, 2009            |   | $   | 46.9   |   |

 

The Company accounts forgoodwill and other intangible assets in accordance with SFAS No. 142,*Goodwill and Other Intangible Assets* (“SFASNo. 142”). SFAS No. 142 requires that goodwill and intangible assetswith indefinite useful lives not be amortized. Instead, these assets are testedfor impairment on a reporting unit basis annually, or on an interim basis whenevents or changes in circumstances warrant. The Company performed its annualtest for impairment as of December 31, 2008 and determined that goodwilland other intangible assets were not impaired at that time. The Company did notidentify any indicators of impairment during the three and six month periodsended June 30, 2009.

 

The following is asummary of other intangible assets subject to amortization at June 30,2009 and December 31, 2008 (in millions):

 
| ** **                               | ** ** | **June 30, 2009**           | ** ** | **December 31, 2008**         | ** ** |
|------------------------------------------|------------|-----------------------------|------------|-------------------------------|------------|
| ** **                               | ** ** | **Gross  Carrying  Amount** | ** ** | **Accumulated  Amortization** | ** ** | **Net  Carrying  Amount** | ** ** | **Gross  Carrying  Amount** | ** ** | **Accumulated  Amortization** | ** ** | **Net  Carrying  Amount** | ** ** |
| Existing  technology and related patents |       | $                           | 14.1       |                          | $          | (9.9 | ) | $ | 4.2 |   | $ | 14.1 |   | $ | (9.2 | ) | $ | 4.9 |   |
| Customer  relationships                  |       | 1.6                         |       | (0.8                          | )          | 0.8 |   | 1.6 |   | (0.6 | ) | 1.0 |   |
| Trade names                              |       | 0.4                         |       | (0.3                          | )          | 0.1 |   | 0.4 |   | (0.3 | ) | 0.1 |   |
| Total  amortizable intangible assets     |       | $                           | 16.1       |                          | $          | (11.0 | ) | $ | 5.1 |   | $ | 16.1 |   | $ | (10.1 | ) | $ | 6.0 |   |

 

For the threemonths ended June 30, 2009 and 2008, the Company recorded amortizationexpense of $0.5 million and $0.3 million, respectively, related to intangibleassets subject to amortization. For the six months ended June 30, 2009 and2008, the Company recorded amortization expense of $0.9 million and $1.3million, respectively, related to intangible assets subject to amortization.

 

The estimated futureamortization expense related to other intangible assets is as follows (inmillions):

 
| 2009 (a)   |   | $   | 0.9    |   |
|------------|--------|-----|--------|--------|
| 2010       |   | 1.7 |   |
| 2011       |   | 1.0 |   |
| 2012       |   | 0.4 |   |
| 2013       |   | 0.4 |   |
| Thereafter |   | 0.7 |   |
| Total      |   | $   | 5.1    |   |

 

----

(a) Amountrepresents estimated amortization expense for the remaining six months endingDecember 31, 2009.

 

**9.****             ****Debt**

 

At June 30, 2009 andDecember 31, 2008, the Company’s debt obligations consisted of the following(in millions):

 

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| ** **                                                                                                                                                                                                                                | ** ** | **June 30,  2009** | ** ** | **December 31,  2008** | ** ** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------|------------|-----------------------------|------------|
| US  Dollar term loan under the Credit Agreement                                                                                                                                                                                           |       | $                       | 138.8      |                        | $          | 144.4 |   |
|                                                                                                                                                                                                                                      |       |                    |       |                        |       |
| US  Dollar revolving loan under the Credit Agreement                                                                                                                                                                                      |       | 22.3                    |       | 35.6                        |       |
|                                                                                                                                                                                                                                      |       |                    |       |                        |       |
| Euro  mortgage loan at six month European Interbank Offered Rate plus 1.00%, 2.7%  at June 30, 2009 collateralized by a building of Bruker AXS GmbH, biannual  principal and interest payments due and payable through 2012          |       | 2.0                     |       | 2.2                         |       |
|                                                                                                                                                                                                                                      |       |                    |       |                        |       |
| Euro  bank loans at fixed rates of 4.65% and 8.01%, respectively, collateralized by  accounts receivable of certain subsidiaries of Bruker AXS, biannual principal  payments and quarterly interest payments due and payable through 2013 |       | 0.3                     |       | 0.3                         |       |
|                                                                                                                                                                                                                                      |       |                    |       |                        |       |
| Euro  bank loans at fixed rate of 2.95%, collateralized by land and buildings of  Bruker Daltonik GmbH, quarterly principal payments and monthly interest payments  due and payable through 2010                                          |       | 0.6                     |       | 1.0                         |       |
|                                                                                                                                                                                                                                      |       |                    |       |                        |       |
| Euro  bank loans at fixed rate of 5.01%, collateralized by land and buildings of  Bruker Optik GmbH, biannual principal payments and monthly interest payments  due and payable through 2013                                              |       | 1.2                     |       | 10.7                        |       |
|                                                                                                                                                                                                                                      |       |                    |       |                        |       |
| Japanese  Yen bank loan at fixed rate of 2.03%, uncollateralized, quarterly principal  and interest payments due and payable through 2011                                                                                                 |       | —                  |       | 1.6                         |       |
|                                                                                                                                                                                                                                      |       |                    |       |                        |       |
| Capital  lease obligations                                                                                                                                                                                                                |       | 4.9                     |       | 5.3                         |       |
| Total  long-term debt                                                                                                                                                                                                                     |       | 170.1                   |       | 201.1                       |       |
| Current  portion of long-term debt                                                                                                                                                                                                        |       | (42.5                   | )          | (18.3                       | )          |
| Total  long-term debt, less current portion                                                                                                                                                                                               |       | $                       | 127.6      |                        | $          | 182.8 |   |

 

In connection with theacquisition of Bruker BioSpin, the Company entered into a credit agreement witha syndication of lenders (the “Credit Agreement”), which provides for arevolving credit line with a maximum commitment of $230.0 million and aterm facility of $150.0 million. The outstanding principal and interestunder the term loan is payable in quarterly installments through December 2012.Borrowings under the Credit Agreement bear interest, at the Company’s option,at either (i) the higher of the prime rate or the federal funds rate plus0.50%, or (ii) adjusted LIBOR, plus margins ranging from 0.40% to 1.25%and a facility fee ranging from 0.10% to 0.20%. As of June 30, 2009, theweighted average interest rate of borrowings under the term facility of theCredit Agreement was approximately 2.8%.

 

Borrowings under theCredit Agreement are secured by the pledge to the banks of 100% of the capitalstock of each of the Company’s wholly-owned domestic subsidiaries and 65% ofthe capital stock of certain of the Company’s direct or indirect wholly-ownedforeign subsidiaries. The Credit Agreement also requires the Company tomaintain certain financial ratios related to maximum leverage and minimuminterest coverage, as defined in the Credit Agreement. In addition to the financialratios, the Credit Agreement restricts, among other things, the Company’sability to do the following: make certain payments; incur additional debt;incur certain liens; make certain investments, including derivative agreements;merge, consolidate, sell or transfer all or substantially all of the Company’sassets; and enter into certain transactions with affiliates.

 

In addition, at June 30,2009 and December 31, 2008, the Company had the following amountsoutstanding 

 

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under revolving loanarrangements (in millions):

 
| ** **                                       | ** ** | **June 30,  2009** | ** ** | **December 31,  2008** | ** ** |
|--------------------------------------------------|------------|-------------------------|------------|-----------------------------|------------|
| Euro  revolving loans under the Credit Agreement |       | $                       | —     |                        | $          | 16.5 |   |
| Other  revolving loans                           |       | 0.6                     |       | 6.2                         |       |
| Total  short-term borrowings                     |       | $                       | 0.6        |                        | $          | 22.7 |   |

 

The following is asummary of the maximum commitments and net amounts available to the Companyunder revolving loans as of June 30, 2009 (in millions):

 
| ** **             | ** ** | **Weighted  Average  Interest Rate** | ** ** | **Total Amount   Committed by  Lenders** | ** ** | **Outstanding  Borrowings** | ** ** | **Outstanding  Letters of  Credit** | ** ** | **Total Amount  Available** | ** ** |
|------------------------|------------|--------------------------------------|------------|------------------------------------------|------------|-----------------------------|------------|-------------------------------------|------------|-----------------------------|------------|
| Credit  Agreement      |       | 0.8                                  | %          | $                                        | 230.0      |                        | $          | 22.3                                |       | $                           | 1.4        |   | $ | 206.3 |   |
| Other  revolving loans |       | 4.9                                  | %          | 66.4                                     |       | 0.6                         |       | 52.3                                |       | 13.5                        |       |
| Total  revolving loans |       | 0.9                                  | %          | $                                        | 296.4      |                        | $          | 22.9                                |       | $                           | 53.7       |   | $ | 219.8 |   |

 

Other revolving loans arewith various financial institutions primarily in Germany, Japan and France. TheCompany’s other revolving lines of credit typically are due upon demand withinterest payable monthly. Certain of these lines of credit are unsecured whileothers are secured by the accounts receivable and inventory of the relatedsubsidiary.

 

**10.****      ****Derivative Instruments andHedging Activities**

 

The Company accounts forderivative financial instruments in accordance with SFAS No. 133,*Accounting for Derivative Instruments and HedgingActivities*, (“SFAS No. 133”) as amended. All derivatives,whether designated as hedging relations or not, are recorded on the unauditedcondensed consolidated balance sheets at fair value. The accounting for changesin fair value of a derivative instrument depends on whether it has beendesignated and qualifies as part of a hedging relationship and further, on thetype of hedging relationship. For those derivative instruments that aredesignated and qualify as hedging instruments, the Company must designate thehedging instrument, based on the exposure being hedged, as a fair value hedge,cash flow hedge or a hedge of a net investment in a foreign operation.

 

A fair value hedge is aderivative instrument designated for the purpose of hedging the exposure ofchanges in fair value of an asset or a liability resulting from a particularrisk. If the derivative is designated as a fair value hedge, the changes in thefair value of the derivative and of the hedged item attributable to the hedgedrisk are both recognized in the same caption in the unaudited condensedconsolidated statements of operations. A cash flow hedge is a derivativeinstrument designated for the purpose of hedging the exposure to variability infuture cash flows resulting from a particular risk. If the derivative isdesignated as a cash flow hedge, the effective portions of changes in the fairvalue of the derivative are recorded in accumulated other comprehensive incomeand are recognized in the results of operations when the hedged item affectsearnings. Ineffective portions of changes in the fair value of cash flow hedgesare recognized in the results of operations. A hedge of a net investment in aforeign operation is designated for the purpose of hedging the exposure ofchanges in value of investments in foreign subsidiaries. If the derivative isdesignated as a hedge of a net investment in a foreign operation, the effectiveportions of changes in the fair value of the derivative are recorded in othercomprehensive income as a part of the currency translation adjustment.Ineffective portions of net investment hedges are recognized in the results ofoperations. For derivative instruments not designated as hedging instruments,changes in fair value are recognized in the results of operations in thecurrent period.

 

The Company is exposed tocertain market risks associated with its ongoing business operations. Theprimary risks that are managed by using derivative instruments are associatedwith changes in interest rates and foreign exchange rates.

 

The Company’s exposure tointerest rate risk relates primarily to outstanding variable-rate debt andadverse movements in the related short-term market rates. The most significantcomponent of the Company’s interest rate 

 

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risk relates to theamounts outstanding under the Credit Agreement. In April 2008, the Companyentered into an interest rate swap arrangement to manage its exposure tointerest rate movements and the related effect on its variable rate debt. Underthis interest rate swap arrangement, the Company pays a fixed rate ofapproximately 3.8% and receives a variable rate based on three month LIBOR. Theinterest rate swap agreement utilized by the Company effectively modifies theCompany’s exposure to interest rate risk by converting a portion of the Company’svariable rate debt to a fixed rate for the term of the Credit Agreement. Theinitial notional amount of this interest rate swap was $90.0 million andit amortizes in proportion to the term debt component of the Credit Agreementthrough December 2012. At June 30, 2009, the notional amount of thisinterest rate swap was $83.3 million. The Company concluded that this swapmet the criteria to qualify as an effective hedge of the variability of cashflows of the interest payments and accounts for the hedge as a cash flow hedgeunder SFAS No. 133. Accordingly, the Company reflects changes in the fairvalue of this interest rate swap in accumulated other comprehensive income, acomponent of shareholders’ equity. The Company expects $2.4 million of theaccumulated loss to be reclassified into earnings over the next twelve months.

 

The Company enters intocontracts for the purchase of goods and the sale of the Company’s products thatare denominated in currencies other than the functional currency of the partiesto the transaction. In accordance with SFAS No. 133, the Company accountsfor these transactions separately, valuing the “embedded derivative” componentof these contracts. At June 30, 2009, contracts denominated in currenciesother than the functional currency of the transacting parties amounted to$43.2 million for the delivery of products and $3.9 million for thepurchase of products. At December 31, 2008, contracts denominated incurrencies other than the functional currency of the transacting partiesamounted to $44.2 million for the delivery of products and$5.4 million for the purchase of products.

 

The fair values ofderivative instruments as of June 30, 2009 and December 31, 2008 areas follows (in millions):

 
| ** **                                                                             | ** ** | **June 30,  2009** | ** ** | **December 31,  2008** | ** ** |
|----------------------------------------------------------------------------------------|------------|-------------------------|------------|-----------------------------|------------|
| Derivative  liabilities:                                                               |       |                    |       |                        |       |
| Derivative  liabilities designated as hedging instruments under SFAS No. 133:     |       |                    |       |                        |       |
| Interest  rate swap contract                                                           |       | $                       | 3.7        |                        | $          | 4.8 |   |
|                                                                                   |       |                    |       |                        |       |
| Derivative  liabilities not designated as hedging instruments under SFAS No. 133: |       |                    |       |                        |       |
| Embedded  derivatives                                                                  |       | 1.6                     |       | 2.2                         |       |
| Total  derivative liabilities                                                          |       | $                       | 5.3        |                        | $          | 7.0 |   |

 

Derivative liabilitiesare recorded in other current liabilities in the unaudited condensedconsolidated balance sheets.

 

The gain recognized inother comprehensive income related to the effective portion of derivativeinstruments designated as hedging instruments for the three and six monthsended June 30, 2009 and 2008 are as follows (in millions):

 
| ** **                   | ** ** | **Three Months Ended June 30,** | ** ** | **Six Months Ended June 30,** | ** ** |
|------------------------------|------------|--------------------------------------|------------|------------------------------------|------------|
| ** **                   | ** ** | **2009**                             | ** ** | **2008**                           | ** ** | **2009** | ** ** | **2008** | ** ** |
| Interest  rate swap contract |       | $                                    | 0.5        |                               | $          | 0.1 |   | $ | 0.1 |   | $ | 0.1 |   |
|                              |            |                                      |            |                                    |            |  |  |  |  |  |  |  |  |

 

The losses reclassifiedfrom accumulated other comprehensive income to net income related to derivativeinstruments designated as hedging instruments for the three and six monthsended June 30, 2009 and 2008 are as follows (in millions):

 

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| ** **                   | ** ** | **Three Months Ended June 30,** | ** ** | **Six Months Ended June 30,** | ** ** |
|------------------------------|------------|--------------------------------------|------------|------------------------------------|------------|
| ** **                   | ** ** | **2009**                             | ** ** | **2008**                           | ** ** | **2009** | ** ** | **2008** | ** ** |
| Interest  rate swap contract |       | $                                    | (0.6       | )                                  | $          | (0.1 | ) | $ | (1.1 | ) | $ | (0.1 | ) |
|                              |            |                                      |            |                                    |            |  |  |  |  |  |  |  |  |

 

The Company did notrecognize any amounts related to ineffectiveness in the consolidated statementsof operations during the three or six months ended June 30, 2009 and 2008.

 

The impact of changes inthe fair value of derivative instruments not designated as hedging instrumentson net income are as follows (in millions):

 
| ** **                  | ** ** | **Three Months Ended June 30,** | ** ** | **Six Months Ended June 30,** | ** ** |
|-----------------------------|------------|--------------------------------------|------------|------------------------------------|------------|
| ** **                  | ** ** | **2009**                             | ** ** | **2008**                           | ** ** | **2009** | ** ** | **2008** | ** ** |
| Foreign  exchange contracts |       | $                                    | (0.3       | )                                  | $          | (0.3 | ) | $ | — |   | $ | (0.6 | ) |
| Embedded  derivatives       |       | (1.0                                 | )          | 1.3                                |       | 0.6 |   | — |   |
| Income  (expense), net      |       | $                                    | (1.3       | )                                  | $          | 1.0 |   | $ | 0.6 |   | $ | (0.6 | ) |

 

The amounts recorded inthe unaudited condensed consolidated statements of operations related toderivative instruments not designated as hedging instruments are recorded ininterest and other income (expense), net.

 

**11.****      ****Restructuring Activities**

 

In the fourth quarter of2008, the Company recorded restructuring charges of $2.3 million, whichconsisted primarily of severance costs associated with a restructuring ofcertain operations in the Netherlands (the “Netherlands Program”). Therestructuring charges associated with the Netherlands Program were allocated tothe Scientific Instruments segment. Approximately $2.2 million of therestructuring charges relate to an involuntary severance program under whichapproximately 30 employees are expected to leave the Company and the balancerelates to exit costs associated with terminating certain leases. In the secondquarter of 2009, the Company recorded an additional $0.3 million ofrestructuring charges related to the involuntary severance component of theNetherlands Program. The impact of the Netherlands Program reduced the numberof employees in sales and marketing and research and development andconsolidates the selling and developments efforts of the Company’s singlecrystal diffraction products. The Company does not expect to incur anyadditional costs related to the Netherlands Program and expects to have madeall of the severance payments by the end of 2009. The liability forrestructuring charges is recorded in other current liabilities in the unauditedcondensed consolidated balance sheets. The reserves related to this program areas follows (in millions):

 
| ** **                         | ** ** | **Total** | ** ** | **Severance** | ** ** | **Exit Costs** | ** ** |
|------------------------------------|------------|-----------|------------|---------------|------------|----------------|------------|
| Balance  at December 31, 2008 |       | $         | 2.3        |          | $          | 2.2            |       | $ | 0.1 |   |
| Restructuring  charges             |       | 0.3       |       | 0.3           |       | —         |       |
| Cash  payments                     |       | (1.9      | )          | (1.8          | )          | (0.1           | )          |
| Balance  at June 30, 2009     |       | $         | 0.7        |          | $          | 0.7            |       | $ | — |   |

 

**12.****      ****Impairment Charges**

 

In the second quarter of2009, the Company recorded an impairment charge of $0.7 million, whichconsisted of certain fixed assets used in the production of certain superconductingwire. The impairment loss was recorded because the Company determined that thecarrying value of the assets exceeded their fair value based on the estimatedundiscounted operating cash flows generated by those assets. The impairmentcharge was allocated to the Energy and Supercon Technologies segment and hasbeen recorded as a component of acquisition-related charges in the unauditedcondensed consolidated statements of operations.

 

**13.****      ****Employee Benefit Plans**

 

Substantially all of theCompany’s employees in Switzerland, France and Japan, as well as certainemployees in Germany, are covered by Company-sponsored defined benefit pensionplans. Retirement benefits are generally 

 

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earned based on years ofservice and compensation during active employment. Eligibility is generallydetermined in accordance with local statutory requirements; however, the levelof benefits and terms of vesting varies among plans.

 

The net periodic pensioncost consists of the following components for the three and six months ended June 30,2009 and 2008 (in millions):

 
| ** **                                 | ** ** | **Three Months Ended June 30,** | ** ** | **Six Months Ended June 30,** | ** ** |
|--------------------------------------------|------------|--------------------------------------|------------|------------------------------------|------------|
| ** **                                 | ** ** | **2009**                             | ** ** | **2008**                           | ** ** | **2009** | ** ** | **2008** | ** ** |
| Components  of net periodic pension costs: |       |                                 |       |                               |       |   |   |   |   |
| Service  cost                              |       | $                                    | 1.1        |                               | $          | 1.1 |   | $ | 2.0 |   | $ | 2.1 |   |
| Interest  cost                             |       | 1.0                                  |       | 1.2                                |       | 2.0 |   | 2.1 |   |
| Expected  return on plan assets            |       | (1.0                                 | )          | (1.0                               | )          | (1.9 | ) | (2.0 | ) |
| Net  periodic benefit costs                |       | $                                    | 1.1        |                               | $          | 1.3 |   | $ | 2.1 |   | $ | 2.2 |   |

 

The Company madecontributions of $1.2 million to its defined benefit plans during the sixmonths ended June 30, 2009 and estimates contributions of $1.2 millionwill be made during the remainder of 2009.

 

**14.****      ****Interest and Other Income(Expense), Net**

 

The components ofinterest and other income (expense), net, were as follows for the three and sixmonths ended June 30, 2009 and 2008 (in millions):

 
| ** **                                                | ** ** | **Three Months Ended June 30,** | ** ** | **Six Months Ended June 30,** | ** ** |
|-----------------------------------------------------------|------------|--------------------------------------|------------|------------------------------------|------------|
| ** **                                                | ** ** | **2009**                             | ** ** | **2008**                           | ** ** | **2009** | ** ** | **2008** | ** ** |
| Interest  income                                          |       | $                                    | 0.4        |                               | $          | 1.9 |   | $ | 0.8 |   | $ | 3.6 |   |
| Interest  expense                                         |       | (2.1                                 | )          | (3.8                               | )          | (4.4 | ) | (5.7 | ) |
| Exchange  gains (losses) on foreign currency transactions |       | (0.7                                 | )          | 3.3                                |       | 0.6 |   | (9.0 | ) |
| Other                                                     |       | (0.5                                 | )          | 2.2                                |       | 0.2 |   | 2.5 |   |
| Interest  and other income (expense), net                 |       | $                                    | (2.9       | )                                  | $          | 3.6 |   | $ | (2.8 | ) | $ | (8.6 | ) |

 

**15.****      ****Provision for Income Taxes**

 

The Company accounts forincome taxes in accordance with SFAS No. 109,*Accounting for Income Taxes* (“SFAS No. 109”). SFAS No. 109requires the asset and liability approach to account for income taxes byrecognizing deferred tax assets and liabilities for the expected future taxconsequences of differences between the financial statement basis and the taxbasis of assets and liabilities, calculated using enacted tax rates in effectfor the year in which the differences are expected to be reflected in the taxreturn. The Company records a valuation allowance to reduce deferred tax assetsto the amount that is more likely than not to be realized.

 

In addition, the Companyaccounts for uncertain tax positions in accordance with the provisions of FASBInterpretation No. 48,*  Accounting for Uncertainty in Income Taxes—aninterpretation of FASB Statement No. 109*(“FIN No. 48”).Among other things, FIN No. 48 provides guidance to address uncertainty intax positions and clarifies the accounting for income taxes by prescribing aminimum recognition threshold, which an income tax position must achieve beforebeing recognized in the financial statements.

 

The income tax provisionfor the three months ended June 30, 2009 was $4.6 million compared to anincome tax provision of $10.3 million for the three months ended June 30,2008, representing effective tax rates of 26.6% and 32.2%, respectively. Theincome tax provision for the six months ended June 30, 2009 was $10.4million compared to an income tax provision of $14.5 million for the six monthsended June 30, 2008, representing effective tax rates of 32.8% and 40.7%,respectively.

 

The Company’s effectivetax rate generally reflects the tax provision (benefit) for non-U.S. entitiesonly, since no benefit was recognized for cumulative losses incurred in theU.S. A full valuation allowance will be maintained for U.S. net operatinglosses and tax credits until evidence exists that it is more likely than notthat the loss carryforward and credit amounts will be utilized to offset U.S.taxable income. The Company’s tax rate may change 

 

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over time as the amountor mix of income and taxes outside the U.S. changes. The effective tax rate iscalculated using projected annual pre-tax income or loss and is affected byresearch and development tax credits, the expected level of other tax benefits,the impact of changes to the valuation allowance, and changes in the mix of theCompany’s pre-tax income and losses among jurisdictions with varying statutorytax rates and credits.

 

The Company hasunrecognized tax benefits of approximately $21.8 million as of June 30,2009, of which $12.1 million, if recognized, would result in a reduction of theCompany’s effective tax rate. The Company recognizes penalties andinterest related to unrecognized tax benefits in the provision for incometaxes. As of June 30, 2009 and December 31, 2008, approximately $3.4million and $3.0 million, respectively, of accrued interest and penalties relatedto uncertain tax positions was included in other current liabilities on theunaudited condensed consolidated balance sheets. Penalties and interest relatedto unrecognized tax benefits in the provision for income taxes of $0.2 millionand $0.2 million were recorded during the three months ended June 30, 2009and 2008, respectively, and $0.4 million and $0.6 million was recorded duringthe six months ended June 30, 2009 and 2008, respectively.

 

The Company files returnsin many foreign and state jurisdictions with varying statutes of limitations,but considers its significant tax jurisdictions to include the United States,Germany and Switzerland. The tax years 2003 to 2008 are open tax years in thesemajor taxing jurisdictions. One of the Company’s Swiss entities is currentlybeing audited for the tax years 2003 through 2006 and the audit is expected tobe completed during 2009. In addition, all of the Company’s German subsidiariesare under tax audit for the years 2003 through 2008. The Company cannotreasonably predict the timing or outcome of these audits.

 

**16.****      ****Comprehensive Income (Loss)**

 

Comprehensive incomerefers to revenues, expenses, gains and losses that under GAAP are included inother comprehensive income, but excluded from net income as these amounts arerecorded directly as an adjustment to shareholders’ equity, net of tax. Thefollowing is a summary of comprehensive income (loss) for the three and sixmonths ended June 30, 2009 and 2008 (in millions):

 
| ** **                                                                                | ** ** | **Three Months Ended June 30,** | ** ** | **Six Months Ended June 30,** | ** ** |
|-------------------------------------------------------------------------------------------|------------|--------------------------------------|------------|------------------------------------|------------|
| ** **                                                                                | ** ** | **2009**                             | ** ** | **2008**                           | ** ** | **2009** | ** ** | **2008** | ** ** |
| Consolidated  net income                                                                  |       | $                                    | 12.7       |                               | $          | 21.7 |   | $ | 21.3 |   | $ | 21.1 |   |
| Foreign  currency translation adjustments                                                 |       | 22.7                                 |       | (3.9                               | )          | (3.7 | ) | 35.2 |   |
| Unrealized  gains on interest rate swap:                                                  |       |                                 |       |                               |       |   |   |   |   |
| Unrealized  holding gains arising during the period                                       |       | 0.5                                  |       | 0.1                                |       | 0.1 |   | 0.1 |   |
| Reclassification  adjustments for settlements included in the determination of net income |       | 0.6                                  |       | 0.1                                |       | 1.1 |   | 0.1 |   |
| Unrealized  losses on available for sale securities                                       |       |                                 |       |                               |       |   |   |   |   |
| Unrealized  holding losses arising during the period                                      |       | —                               |       | (0.1                               | )          | — |   | (0.1 | ) |
| Reclassification  adjustments for settlements included in the determination of net income |       | —                               |       | (1.3                               | )          | — |   | (1.3 | ) |
| Pension  liability adjustments                                                            |       | —                               |       | 0.1                                |       | 1.0 |   | (0.3 | ) |
| Total  comprehensive income                                                               |       | 36.5                                 |       |                               | 16.7       |   | 19.8 |   | 54.8 |   |
| Less:  Comprehensive income (loss) attributable to noncontrolling interests               |       | (0.2                                 | )          | —                             |       | — |   | 0.2 |   |
| Comprehensive  income attributable to Bruker Corporation                                  |       | $                                    | 36.7       |                               | $          | 16.7 |   | $ | 19.8 |   | $ | 54.6 |   |

 

**17. Noncontrolling Interests**

 

Noncontrolling interestsrepresents the minority shareholders’ proportionate share of the net incomerecorded by the Company’s four majority-owned indirect subsidiaries, BrukerBaltic Ltd., InCoaTec GmbH and Perch Solutions OY, which are included in theScientific Instruments segment, and RI Research Instruments GmbH which isincluded in the Energy and Supercon Technologies segment. Net income (loss)attributable to noncontrolling interests for the three months ended June 30,2009 and June 30, 2008 was $(0.2) million and $0.0 million, respectively.Net income attributable to noncontrolling interests for the six months ended June 30,2009 and June 30, 

 

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2008 was $0.0 million and$0.2 million, respectively. There were no transfers to or from thenoncontrolling interests during the six months ended June 30, 2009 or June 30,2008.

 

**18.****      ****Commitments and Contingencies**

 

***Legal***

 

Lawsuits, claims andproceedings of a nature considered normal to its businesses may be pending fromtime to time against the Company. The Company believes the outcome of theseproceedings, if any, will not have a material impact on the Company’s financialposition or results of operations. As of June 30, 2009 and December 31,2008, no accruals have been recorded for such potential contingencies.

 

***Lettersof Credit and Guarantees***

 

At June 30, 2009 andDecember 31, 2008, the Company had bank guarantees of $53.7 millionand $62.1 million, respectively, for its customer advances. Thesearrangements guarantee the refund of advance payments received from customersin the event that the merchandise is not delivered in compliance with the termsof the contract. Certain of these guarantees affect the availability of theCompany’s lines of credit.

 

**19.****      ****Business Segment Information**

 

SFAS No. 131,*Disclosures about Segments of an Enterprise andRelated Information*, establishes standards for reporting informationabout operating segments in annual financial statements of public businessenterprises. It also establishes standards for related disclosures aboutproducts and service, geographic areas and major customers. Operating segmentsare identified as components of an enterprise for which separate discrete financialinformation is available for evaluation by the chief operating decision makerfor the purpose of allocating resources and assessing performance.

 

The Company hasdetermined that it has five operating segments, representing each of its fivedivisions: Bruker AXS, Bruker BioSpin, Bruker Daltonics, Bruker Optics andBruker Energy and Supercon Technologies. Bruker AXS is in the business ofmanufacturing and distributing advanced X-ray and spark-OES instrumentationused in non-destructive molecular and elemental analysis. Bruker BioSpin is inthe business of manufacturing and distributing enabling life science toolsbased on magnetic resonance technology. Bruker Daltonics is in the business ofmanufacturing and distributing mass spectrometry instruments that can beintegrated and used along with other analytical instruments and our CBRN detectionproducts. Bruker Optics is in the business of manufacturing and distributingresearch, analytical and process analysis instruments and solutions based oninfrared and Raman molecular spectroscopy technologies. Bruker Energy andSupercon Technologies is in the business of developing and producing lowtemperature superconductor and high temperature superconductor wires for use inadvanced magnet technology and energy applications as well as linearaccelerators, accelerator cavities, insertion devices, superconducting fault currentlimiters, other accelerator components and specialty superconducting magnetsfor physics and energy research and a variety of other scientific applications.

 

The Company has combinedthe Bruker AXS, Bruker BioSpin, Bruker Daltonics and Bruker Optics operatingsegments into the Scientific Instruments reporting segment because each hassimilar economic characteristics, product processes and services, types andclasses of customers, methods of distribution and regulatory environments.

 

Selected business segmentinformation for the three and six months ended June 30, 2009 and 2008 ispresented below (in millions):

 

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| ** **                               | ** ** | **Three Months Ended June 30,** | ** ** | **Six Months Ended June 30,** | ** ** |
|------------------------------------------|------------|--------------------------------------|------------|------------------------------------|------------|
| ** **                               | ** ** | **2009**                             | ** ** | **2008**                           | ** ** | **2009** | ** ** | **2008** | ** ** |
| Revenue:                                 | ** ** | ** **                           | ** ** | ** **                         | ** ** | ** ** | ** ** | ** ** | ** ** |
| Scientific  Instruments                  |       | $                                    | 241.3      |                               | $          | 303.0 |   | $ | 464.9 |   | $ | 533.5 |   |
| Energy  and Superconducting Technologies |       | 13.7                                 |       | 12.5                               |       | 21.8 |   | 22.4 |   |
| Eliminations  (a)                        |       | (2.5                                 | )          | (4.0                               | )          | (3.7 | ) | (6.1 | ) |
| Total  revenue                           |       | $                                    | 252.5      |                               | $          | 311.5 |   | $ | 483.0 |   | $ | 549.8 |   |
|                                     |       |                                 |       |                               |       |   |   |   |   |
| Operating  Income:                       | ** ** | ** **                           | ** ** | ** **                         | ** ** | ** ** | ** ** | ** ** | ** ** |
| Scientific  Instruments                  |       | $                                    | 20.4       |                               | $          | 29.5 |   | $ | 36.5 |   | $ | 47.7 |   |
| Energy  and Superconducting Technologies |       | (0.7                                 | )          | (1.3                               | )          | (3.1 | ) | (3.7 | ) |
| Corporate,  eliminations and other (b)   |       | 0.5                                  |       | 0.2                                |       | 1.1 |   | 0.2 |   |
| Total  operating income                  |       | $                                    | 20.2       |                               | $          | 28.4 |   | $ | 34.5 |   | $ | 44.2 |   |

 

----

(a) Representsproduct and service revenue between reportable segments.

(b) Representscorporate costs and eliminations not allocated to the reportable segments.

 

Total assets by segmentas of June 30, 2009 and December 31, 2008 are as follows (inmillions):

 
| ** **                               | ** ** | **June 30,  2009** | ** ** | **December 31,  2008** | ** ** |
|------------------------------------------|------------|-------------------------|------------|-----------------------------|------------|
| Scientific  Instruments                  |       | $                       | 1,041.0    |                        | $          | 1,081.5 |   |
| Energy  and Superconducting Technologies |       | 56.3                    |       | 39.4                        |       |
| Corporate,  eliminations and other (a)   |       | (9.8                    | )          | (4.6                        | )          |
| Total                                    |       | $                       | 1,087.5    |                        | $          | 1,116.3 |   |

 

----

(a) Representscorporate assets not allocated to the reportable segments and eliminations ofintercompany transactions.

 

**20.****      ****Recent Accounting Pronouncements**

 

In June 2009, theFASB issued SFAS No. 168, *The FASB StandardsCodification and the Hierarchy of Generally Accepted Accounting Principles – areplacement of FASB Statement 162* (“SFAS No. 168”). SFAS No. 168is effective for fiscal years and interim periods, ending after September 15,2009. SFAS No. 168 is intended to improve financial reporting byidentifying the *FASB Accounting StandardsCodification*and rules and interpretive releases of the SECunder authority of federal securities laws as the sole sources of authoritativeaccounting principles to be used in preparing financial statements that arepresented in conformity with GAAP for SEC registrants. The adoption of SFAS No. 168is not expected to have a material impact on the Company’s results ofoperations, financial position or cash flows.

 

In December 2008,the FASB issued Staff Position No. 132(R)-1,*Employers’ Disclosures about Postretirement Benefit Plan Assets*(“FSP 132(R)-1”). FSP 132(R)-1 requires detailed disclosures regarding theinvestment strategies, fair value measurements, and concentrations of risk ofplan assets of a defined benefit pension or other postretirement plan. FSP132(R)-1 is effective for fiscal years ending after December 15, 2009 andwill be applied prospectively. The Company is currently assessing the impactthat FSP 132(R)-1 will have on its results of operations and financialposition.

 

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| **ITEM  2.** | ** ** | **MANAGEMENT’S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS** |
|--------------|------------|-------------------------------------------------------------------------------------------------|

 

The following discussionof our financial condition and results of operations should be read inconjunction with our interim unaudited condensed consolidated financialstatements and the notes to those statements included in Part 1, Item 1 ofthis Quarterly Report on Form 10-Q, and in conjunction with theconsolidated financial statements contained in our Annual Report on Form 10-Kfor the year ended December 31, 2008.

 

Statements contained inManagement’s Discussion and Analysis of Financial Condition and Results ofOperations, which express that we “believe,” “anticipate,” “plan,” “expect,” “seek,”“estimate,” or “should,” as well as other statements, which are not historicalfact, are forward-looking statements within the meaning of the PrivateSecurities Litigation Act of 1995. Actual events or results may differ materiallyfrom those set forth in forward-looking statements. Certain factors that mightcause such a difference are discussed in “Factors Affecting Our Business,Operating Results and Financial Condition” set forth in our Annual Report on Form 10-Kfor the year ended December 31, 2008.

 

**OVERVIEW**

 

The following Management’sDiscussion and Analysis of Financial Condition and Results of Operations, orMD&A, describes the principal factors affecting the results of ouroperations, financial condition and changes in financial condition, as well asour critical accounting policies and estimates. Our MD&A is organized asfollows:

 

·                  *Executive overview*. This section provides a generaldescription and history of our business, a brief discussion of our reportablesegments, significant recent developments in our business and otheropportunities, challenges and risks that may impact our business in the future.

 

·                  *Critical accountingpolicies*. Thissection discusses the accounting estimates that are considered important to ourfinancial position and results of operations and that require us to exercisesubjective or complex judgments in their application.

 

·                  *Results of operations*. This section provides our analysis ofthe significant line items on our consolidated statement of operations for thethree and six months ended June 30, 2009 compared to the three and sixmonths ended June 30, 2008.

 

·                  *Liquidity and capitalresources*. Thissection provides an analysis of our liquidity and cash flow and a discussion ofour outstanding debt and commitments.

 

·                  *Recent accountingpronouncements*.This section provides information about new accounting standards that have beenissued but for which adoption is not yet required.

 

**EXECUTIVEOVERVIEW**

 

**BusinessOverview**

 

Bruker Corporation and itswholly-owned subsidiaries design, manufacture, market and service proprietarylife science and materials research systems based on our core technologyplatforms, including X-ray technologies, magnetic resonance technologies, massspectrometry technologies, optical emission spectroscopy and infrared and Ramanmolecular spectroscopy technologies. We also manufacture and distribute a broadrange of field analytical systems for chemical, biological, radiological andnuclear, or CBRN, detection. We also develop and manufacture low temperatureand high temperature wires for use in advanced magnet technology and energyapplications. We maintain major technical and manufacturing centers in Europe,North America and Japan and we have sales offices located throughout the world.Our corporate headquarters are located in Billerica, Massachusetts.

 

Our business strategy isto capitalize on our ability to innovate and generate above industry-averagerevenue performance, both organically and through acquisitions. Our growthstrategy combined with anticipated 

 

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improvements to our grossprofit margins and increased leverage on our research and development, salesand marketing and distribution investments and general and administrativeexpenses is expected to enhance our operating margins and improve our earningsin the future.

 

On February 26,2008, we completed our acquisition of Bruker BioSpin. Both the Company andBruker BioSpin were majority owned by six affiliated shareholders prior to theacquisition. As a result, the acquisition of Bruker BioSpin is considered acombination of companies under common control, and has been accounted for athistorical carrying values. Historical unaudited condensed consolidated balancesheets, statements of operations, statements of cash flows and notes to theconsolidated financial statements have been restated by combining thehistorical consolidated financial statements of Bruker Corporation with thoseof Bruker BioSpin. Because the transaction was accounted for as an acquisitionof businesses under common control, all one-time transaction costs wereexpensed as incurred.

 

With the addition ofBruker BioSpin, we enhanced our scientific instruments business and thusfurthered our position as a leading supplier of life science and materialsresearch systems. The technologies of Bruker BioSpin are particularlycomplementary to our accurate-mass electrospray time-of-flight massspectrometers and our single-crystal diffraction X-ray spectrometers and havecreated revenue synergies and provided opportunities to supply customers withequipment packages that have a broader range of applications and value. Theaddition of Bruker BioSpin has also enhanced our distribution of scientificinstruments in the Americas, Europe and Asia and our sales and serviceinfrastructure.

 

We are organized intofive operating segments, representing each of our five divisions: Bruker AXS,Bruker BioSpin, Bruker Daltonics, Bruker Optics and Bruker Energy and SuperconTechnologies. Bruker AXS is in the business of manufacturing and distributingadvanced X-ray and spark-OES instrumentation used in non-destructive molecularand elemental analysis. Bruker BioSpin is in the business of manufacturing anddistributing enabling life science tools based on magnetic resonancetechnology. Bruker Daltonics is in the business of manufacturing anddistributing mass spectrometry instruments that can be integrated and usedalong with other analytical instruments and our CBRN detection products. BrukerOptics is in the business of manufacturing and distributing research,analytical and process analysis instruments and solutions based on infrared andRaman molecular spectroscopy technologies. Bruker Energy and SuperconTechnologies is in the business of developing and producing low temperaturesuperconductor and high temperature superconductor wires for use in advancedmagnet technology and energy applications as well as linear accelerators,accelerator cavities, insertion devices, superconducting fault current limiters,other accelerator components and specialty superconducting magnets for physicsand energy research and a variety of other scientific applications.

 

We have combined theBruker AXS, Bruker BioSpin, Bruker Daltonics and Bruker Optics operatingsegments into the Scientific Instruments reporting segment because each hassimilar economic characteristics, product processes and services, types andclasses of customers, methods of distribution and regulatory environments. Assuch, management reports its results based on the following segments:

 

·                  *Scientific Instruments.*The operations ofthis segment include the design, manufacture and distribution of advancedinstrumentation and automated solutions based on X-ray technology, spark-OEStechnology, magnetic resonance technology, mass spectrometry technology andinfrared and Raman molecular spectroscopy technology. Typical customers of theScientific Instruments segment include pharmaceutical, biotechnology,proteomics and molecular diagnostic companies, academic institutions,government agencies, semiconductor companies, chemical, cement, metals andpetroleum companies, raw material manufacturers and food, beverage andagricultural companies.

 

·                  *Energy and Supercon Technologies**.* The operations of this segment includedevelopment and production of low temperature superconductor and hightemperature superconductor wires for use in advanced magnet technology andenergy applications as well as electron and ion linear accelerators,superconducting and normal conducting accelerator cavities, insertion devices, superconductingfault current limiters, crystal growth magnets and other accelerator componentsfor physics and energy research and a variety of other scientific applications.

 

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**FinancialOverview**

 

For the three monthsended June 30, 2009, our revenue decreased by $59.0 million, or 18.9%, to$252.5 million, compared to $311.5 million for the comparable period in 2008.Included in this change in revenue is a reduction of approximately $24.4million from the impact of foreign exchange due to the strengthening of theU.S. Dollar versus the Euro and other foreign currencies. Excluding the effectof foreign exchange, revenue decreased by $34.6 million, or 11.1%. The decreasein revenue, excluding the effect of foreign exchange, is attributable to theScientific Instruments segment and is related primarily to decreased salesvolume of magnetic resonance systems and X-ray and spark-OES products. Thedecrease in revenue was offset, in part, by higher volumes of mass spectrometrysystems. The mix of products sold in the Scientific Instruments segment asdescribed above is consistent with the trend in revenue over the previous fourquarters and continues to reflect lower demand from industrial customerspartially offset by increased demand from academic and government customers.The Company attributes this trend in reduced sales to industrial customers as afunction of the worldwide recession, while spending from academic andgovernment customers has increased as a result of stimulus packages implementedby governments in various countries, including the United States, Germany andJapan.

 

For the six months ended June 30,2009, our revenue decreased by $66.8 million, or 12.2%, to $483.0 million,compared to $549.8 million for the comparable period in 2008. Included in thischange in revenue is a reduction of approximately $43.0 million from the impactof foreign exchange due to the strengthening of the U.S. Dollar versus the Euroand other foreign currencies. Excluding the effect of foreign exchange, revenuedecreased by $23.8 million, or 4.4%. The decrease in revenue, excluding theeffect of foreign exchange, is attributable to the Scientific Instrumentssegment and is related primarily to decreased sales volume of magneticresonance systems and X-ray and spark-OES products. The decrease in revenue wasoffset, in part, by higher volumes of mass spectrometry systems.

 

Income from operationsfor the three months ended June 30, 2009 was $20.2 million, resulting inan operating margin of 8.0%, compared to income from operations of $28.4million, resulting in an operating margin of 9.1%, for the comparable period in2008. Income from operations for the three months ended June 30, 2009decreased by $8.2 million as a result of lower gross profits partially offsetby a decrease in operating expenses. Our gross profit margin as a percentage ofrevenue for the second quarter of 2009 was 44.0%, compared to 41.6% for thecomparable period in 2008. Lower gross profits were driven by lower revenues,while the improvement in gross profit margins as a percentage of revenue is afunction of product mix and reflects higher margins on newly introduced massspectrometry products. Productivity improvements, the benefits of cost cuttinginitiatives and changes in foreign currency exchange rates also contributed tothe improvement in gross profit margins as a percentage of revenue. Thedecrease in operating expenses is attributable to changes in foreign currencyexchange rates and cost savings programs implemented in the second half of2008.

 

Income from operationsfor the six months ended June 30, 2009 was $34.5 million, resulting in anoperating margin of 7.1%, compared to income from operations of $44.2 million,resulting in an operating margin of 8.0%, for the comparable period in 2008.Operating margins in the first half of 2008 included $6.2 million ofacquisition-related charges incurred in connection with the acquisition ofBruker BioSpin. Excluding the effect of these acquisition-related charges,income from operations decreased by $15.9 million as a result of lower grossprofits partially offset by a decrease in operating expenses. Our gross profitmargin as a percentage of revenue was 44.3% for the first half of 2009 and thecomparable period in 2008. Lower gross profits were driven by lower revenues.The decrease in operating expenses is attributable to changes in foreigncurrency exchange rates and cost savings programs implemented in the secondhalf of 2008.

 

During the six monthsended June 30, 2009, we recorded net gains on foreign currencytransactions of $0.6 million compared to net losses of $9.0 million for thecomparable period in 2008. We incurred $12.2 million of foreign exchange lossesin the first three months of 2008 that were driven by the re-measurement ofcertain foreign currency denominated assets, principally cash, inter-companyreceivables and a short-term inter-company loan into the functional currency ofthe affected entities. In the last twelve months, we have implemented programsdesigned to reduce our exposure to changes in foreign currency exchange ratesand are considering additional actions, including a transactional hedgingprogram.

 

We incurred approximately$4.4 million of interest expense during the six months ended June 30, 2009compared to $5.7 million for the comparable period in 2008. Of the totalinterest expense incurred during the six months ended June 30, 2009,approximately $3.5 million related to a credit facility that we entered intoduring the 

 

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first quarter of 2008. Weinitially borrowed $351.0 million under this credit facility in order tofinance the acquisition of Bruker BioSpin. In the first half of 2009, we repaidapproximately $34.6 million of the amounts outstanding under this creditagreement and from the inception of this credit agreement, we have reduced thenet amount outstanding by approximately $190.0 million.

 

Our effective tax ratefor the three months ended June 30, 2009 was 26.6%, compared to 32.2% forthe comparable period in 2008. Our effective tax rate for the six months ended June 30,2009 was 32.8%, compared to 40.7% for the comparable period in 2008. The changein our effective tax rate relates primarily to the amount and mix of income andtaxes outside the U.S because we are not able to record a tax benefit on lossesincurred in the U.S. However, in addition to the amount and mix of income andtaxes outside the U.S., our income tax provision in the first quarter of 2008was negatively impacted by acquisition-related charges and foreign exchangelosses that did not result in significant tax benefits because they wereincurred primarily either in the U.S. or in foreign locations with relativelylow tax rates.

 

Our net incomeattributable to the shareholders of Bruker Corporation for the three monthsended June 30, 2009 was $12.9 million, or $0.08 per diluted share,compared to $21.7 million, or $0.13 per diluted share, for the comparableperiod in 2008. Our net income attributable to the shareholders of BrukerCorporation for the six months ended June 30, 2009 was $21.3 million, or$0.13 per diluted share, compared to $20.9 million, or $0.13 per diluted share,for the comparable period in 2008.

 

**CRITICALACCOUNTING POLICIES**

 

This discussion andanalysis of our financial condition and results of operations is based upon ourunaudited condensed consolidated financial statements, which have been preparedin accordance with accounting principles generally accepted in the UnitedStates of America. The preparation of these financial statements requires thatwe make estimates and assumptions that affect the reported amounts of assetsand liabilities and the disclosure of contingent assets and liabilities at thedate of the financial statements and reported amounts of revenues and expensesduring the reporting period. On an ongoing basis, management evaluates itsestimates and judgments, including those related to revenue recognition, incometaxes, allowance for doubtful accounts, inventories, goodwill, other intangibleassets and long-lived assets, warranty costs and derivative financialinstruments. We base our estimates and judgments on historical experience,current market and economic conditions, industry trends and other assumptionsthat we believe are reasonable and form the basis for making judgments aboutthe carrying value of assets and liabilities that are not readily apparent fromother sources. Actual results could differ from these estimates.

 

We believe the followingcritical accounting policies to be both those most important to the portrayalof our financial position and results of operations and those that require themost subjective judgment.

 

*Revenuerecognition.*Werecognize revenue from system sales when persuasive evidence of an arrangementexists, the price is fixed or determinable, title and risk of loss has beentransferred to the customer and collectibility of the resulting receivable isreasonably assured. Title and risk of loss generally are transferred to thecustomer upon receipt of a signed customer acceptance form for a system thathas been shipped, installed, and for which the customer has been trained. As aresult, the timing of customer acceptance or readiness could cause our reportedrevenues to differ materially from expectations. When products are sold throughan independent distributor or a strategic distribution partner, who assumesresponsibility for installation, we recognize the system sale when the producthas been shipped and title and risk of loss have been transferred to thedistributor. Our distributors do not have price protection rights or rights ofreturn; however, our products are typically warranted to be free from defectfor a period of one year. Revenue is deferred until cash is received when asignificant portion of the fee is due over one year after delivery,installation and acceptance of a system. For arrangements with multipleelements, we recognize revenue for each element based on the fair value of theelement, provided all other criteria for revenue recognition have been met. Thefair value for each element provided in multiple element arrangements istypically determined by referencing historical sales prices when the element issold separately. Changes in our ability to establish the fair value for eachelement in multiple element arrangements could affect the timing of revenuerecognition. Revenue from accessories and parts is recognized upon shipment andservice revenue is recognized as the services are performed. We also havecontracts for which we apply the percentage-of-completion method for revenuerecognition. Application of the percentage-of-completion method requires us tomake reasonable estimates 

 

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of the extent of progresstoward completion of the contract and the total costs we will incur under thecontract. Changes in our estimates could affect the timing of revenuerecognition. Grant revenue is recognized when we complete the services requiredunder the grant.

 

*Incometaxes.* Weestimate the degree to which tax assets and loss carryforwards will result in abenefit based on expected profitability by tax jurisdiction, and we provide avaluation allowance for tax assets and loss carryforwards that we believe willmore likely than not go unused. If it becomes more likely than not that a taxasset or loss carryforward will be used for which a reserve has been provided,we reverse the related valuation allowance. If our actual future taxable incomeby tax jurisdiction differs from estimates, additional allowances or reversalsof reserves may be necessary.

 

*Allowancefor doubtful accounts.* We maintain allowances for doubtful accounts for estimated lossesresulting from the inability of our customers to pay amounts due. If thefinancial condition of our customers were to deteriorate, reducing their abilityto make payments, additional allowances would be required, resulting in acharge to operations.

 

*Inventories.* Inventories are stated at the lower ofcost or market, with costs determined by the first-in, first-out method for amajority of subsidiaries and by average cost for certain internationalsubsidiaries. We record provisions to account for excess and obsolete inventoryto reflect the expected non-saleable or non-refundable inventory based on anevaluation of slow moving products. If ultimate usage or demand variessignificantly from expected usage or demand, additional write-downs may berequired, resulting in additional charges to operations.

 

*Goodwill,other intangible assets and other long-lived assets.* We evaluate whether goodwill andindefinite lived intangible assets are impaired annually and when events occuror circumstances change. Goodwill is impaired when the fair value of areporting unit is less than its carrying amount. Fair value is determined usingdiscounted future cash flows. We also review long-lived intangible assets andother assets when indication of potential impairment exists, such as asignificant reduction in undiscounted cash flows associated with the assets.Should the fair value of our long-lived assets decline because of reducedoperating performance, market declines, or other indicators of impairment, acharge to operations for impairment may be necessary.

 

*Warrantycosts.* Wenormally provide a one year parts and labor warranty with the purchase ofequipment. The anticipated cost for this warranty is accrued upon recognitionof the sale based on historical warranty rates and our assumptions of futurewarranty claims. The warranty accrual is included as a current liability on theunaudited condensed consolidated balance sheets. Although our products undergoquality assurance and testing procedures throughout the production process, ourwarranty obligation is affected by product failure rates, material usage andservice delivery costs incurred in correcting a product failure. Although ouractual warranty costs have historically been consistent with expectations, tothe extent warranty claim activity or costs associated with servicing thoseclaims differ from our estimates, revisions to the warranty accrual may berequired.

 

*Derivativefinancial instruments.* All derivative instruments are recorded as other assets or otherliabilities at fair value, which is calculated as an estimate of the futurecash flows, and subsequent changes in a derivative’s fair value are recognizedin income, unless specific hedge accounting criteria are met. Changes in thefair value of a derivative that is highly effective and designated as a cashflow hedge are recognized in accumulated other comprehensive income until theforecasted transaction occurs or it becomes probable that the forecastedtransaction will not occur. We perform an assessment at the inception of thehedge and on a quarterly basis thereafter, to determine whether our derivativesare highly effective in offsetting changes in the value of the hedged items.Any changes in the fair value resulting from hedge ineffectiveness areimmediately recognized as income or expense.

 

**RESULTSOF OPERATIONS**

 

***Three Months Ended June 30, 2009 Compared to the ThreeMonths Ended June 30, 2008***

 

***Consolidated Results***

 

The following tablepresents our results for the three months ended June 30, 2009 and 2008(dollars in millions):

 

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| ** **                                                                                       | ** ** | **Three Months Ended  June 30,** | ** **  |
|--------------------------------------------------------------------------------------------------|------------|----------------------------------|-------------|
| ** **                                                                                       | ** ** | **2009**                         | ** **  | **2008** | ** ** |
| Product revenue                                                                                  |       | $                                |  222.9 |   | $ |  280.3 |   |
| Service revenue                                                                                  |       | 28.3                             |        | 30.2 |   |
| Other revenue                                                                                    |       | 1.3                              |        | 1.0 |   |
| Total revenue                                                                                    |       | 252.5                            |        | 311.5 |   |
|                                                                                             |       |                             |        |   |   |
| Cost of product  revenue                                                                         |       | 125.2                            |        | 162.5 |   |
| Cost of service  revenue                                                                         |       | 16.1                             |        | 19.4 |   |
| Total cost of  revenue                                                                           |       | 141.3                            |        | 181.9 |   |
| Gross profit                                                                                     |       | 111.2                            |        | 129.6 |   |
|                                                                                             |       |                             |        |   |   |
| Operating  expenses:                                                                             |       |                             |        |   |   |
| Sales and  marketing                                                                             |       | 43.9                             |        | 47.1 |   |
| General and  administrative                                                                      |       | 17.0                             |        | 17.2 |   |
| Research and  development                                                                        |       | 31.1                             |        | 36.5 |   |
| Acquisition-related  charges (credits), net                                                      |       | (1.0                             | )           | 0.4 |   |
| Total operating  expenses                                                                        |       | 91.0                             |        | 101.2 |   |
| Operating income                                                                                 |       | 20.2                             |        | 28.4 |   |
|                                                                                             |       |                             |        |   |   |
| Interest and  other income (expense), net                                                        |       | (2.9                             | )           | 3.6 |   |
| Income before  income tax provision and noncontrolling interest in consolidated subsidiaries     |       | 17.3                             |        | 32.0 |   |
| Income tax  provision                                                                            |       | 4.6                              |        | 10.3 |   |
| Consolidated net  income                                                                         |       | 12.7                             |        | 21.7 |   |
| Less: net income  (loss) attributable to noncontrolling interests                                |       | (0.2                             | )           | — |   |
| Net income  attributable to Bruker Corporation                                                   |       | $                                |  12.9  |   | $ |  21.7 |   |
|                                                                                             |       |                             |        |   |   |
| Net income per common  share attributable to Bruker Corporation shareholders - basic and diluted |       | $                                |  0.08  |   | $ |  0.13 |   |
|                                                                                             |       |                             |        |   |   |
| Weighted average  common shares outstanding:                                                     |       |                             |        |   |   |
| Basic                                                                                            |       | 163.3                            |        | 162.4 |   |
| Diluted                                                                                          |       | 164.7                            |        | 165.5 |   |

 

***Revenue***

 

Our revenue decreased by$59.0 million, or 18.9%, to $252.5 million for the three months ended June 30,2009, compared to $311.5 million for the comparable period in 2008. Included inthis change in revenue is approximately $24.4 million from the impact offoreign exchange. Excluding the effect of foreign exchange, revenue decreasedby 11.1%. The decrease in revenue, excluding the effect of foreign exchange, isattributable to the Scientific Instruments segment and is related primarily todecreased sales volume of magnetic resonance systems and X-ray and spark-OESproducts. The decrease in revenue was offset, in part, by higher volumes ofmass spectrometry systems. The mix of products sold in the ScientificInstruments segment is consistent with the trend in revenue over the previousfour quarters and continues to reflect lower demand from industrial customersoffset by increased demand from academic and government customers.

 

***Cost of Revenue***

 

Our cost of product andservice revenue for the three months ended June 30, 2009, was $141.3million, resulting 

 

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in a gross profit marginof 44.0%, compared to cost of product and service revenue of $181.9 million,resulting in a gross profit margin of 41.6%, for the comparable period in 2008.Lower gross profits were driven by lower revenues, while the improvement ingross profit margins as a percentage of revenue is a function of product mixand reflects higher margins on newly introduced mass spectrometry products.Productivity improvements, the benefits of cost cutting initiatives and changesin foreign currency exchange rates also contributed to the improvement in grossprofit margins as a percentage of revenue.

 

***Sales and Marketing***

 

Our sales and marketingexpense for the three months ended June 30, 2009 decreased to $43.9million, or 17.5% of product and service revenue, from $47.1 million, or 15.2%of product and service revenue, for the comparable period in 2008. The decreasein sales and marketing expense is attributable mainly to changes in foreigncurrency exchange rates, primarily the Euro. Additionally, we have started torealize the benefits from certain cost cutting initiatives, but the savingswere partially offset by selling and marketing efforts associated with a numberof recently introduced products.

 

***General and Administrative***

 

Our general andadministrative expense for the three months ended June 30, 2009 was $17.0million, or 6.8% of product and service revenue, and was essentially flatcompared with general and administrative expense of $17.2 million, or 5.5% ofproduct and service revenue, for the comparable period in 2008.

 

***Research and Development***

 

Our research anddevelopment expense for the three months ended June 30, 2009 decreased to$31.1 million, or 12.4% of product and service revenue, from $36.5 million, or11.8% of product and service revenue, for the comparable period in 2008. Thedecrease in research and development expense is attributable mainly to changesin foreign currency exchange rates, primarily the Euro, as a majority of ourresearch and development is performed in Europe. Additionally, we have startedto realize the benefits from certain cost cutting initiatives, but the savingswere partially offset by investments in a number of new products and applicationsscheduled to be released in the next six to twelve months.

 

***Acquisition-Related Charges (Credits), Net***

 

Acquisition-relatedcredits of $(1.0) million in the second quarter of 2009 relate entirely to theEnergy and Supercon Technologies segment and include a bargain purchase gain of$2.1 million recorded in connection with the acquisition of the RI businessfrom Varian Medical Systems, Inc. offset, in part, by $0.4 million oftransaction costs incurred in connection with the acquisition of the RIbusiness and $0.7 million of impairment charges associated with certain fixedassets used in the production of certain superconducting wire.

 

Acquisition-relatedcharges in the second quarter of 2008 relate entirely to the ScientificInstruments segment and consist of $0.4 million of transaction costs incurredin connection with the acquisition of Bruker BioSpin. The acquisition of BrukerBioSpin represented a combination of companies under common control due to amajority of ownership of both Bruker Corporation and Bruker BioSpin by the sameindividuals and, as a result, transaction costs were expensed as incurred.

 

***Interest and Other Income (Expense), Net***

 

Interest and other income(expense), net during the three months ended June 30, 2009 was $(2.9)million, compared to $3.6 million for the comparable period of 2008.

 

During the three monthsended June 30, 2009, the major components within interest and other income(expense), net were net interest expense of $1.7 million and realized andunrealized losses on foreign currency transactions of $0.7 million. Duringthe three months ended June 30, 2008, the major component within interestand other income (expense), net, was realized and unrealized losses on foreigncurrency transactions of $3.3 million.

 

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***Income Tax Provision***

 

Our effective tax rategenerally reflects our tax provision for non-U.S. entities only since nobenefit was recognized for losses incurred in the U.S. We will maintain a fullvaluation allowance for our U.S. net operating losses and tax credits untilevidence exists that it is more likely than not that the loss carryforward andcredit amounts will be utilized to offset U.S. taxable income. Our tax rate maychange over time as the amount and mix of income and taxes outside the U.S.changes. The effective tax rate is calculated using our projected annualpre-tax income or loss and is affected by tax credits, the expected level ofother tax benefits, and the impact of changes to the valuation allowance, aswell as changes in the mix of our pre-tax income and losses among jurisdictionswith varying statutory tax rates and credits.

 

The income tax provisionfor the three months ended June 30, 2009, was $4.6 million compared to anincome tax provision of $10.3 million for the three months ended June 30,2008, representing effective tax rates of 26.6% and 32.2%, respectively. Thechange in our effective tax rate relates primarily to the amount and mix ofincome and taxes outside the U.S.

 

***Net Income Attributable to NoncontrollingInterests***

 

Net income (loss)attributable to noncontrolling interests for the three months ended June 30,2009 was $(0.2) million compared to $0.0 million for the comparable period of2008. Net income attributable to noncontrolling interests represents theminority shareholders’ proportionate share of the net income recorded by fourmajority-owned indirect subsidiaries, Bruker Baltic Ltd., InCoaTec GmbH andPerch Solutions OY which are included in the Scientific Instruments segment,and RI Research Instruments GmbH which is included in the Energy and Supercon Technologiessegment.

 

***Net Income Attributable to BrukerCorporation***

 

Our net income for thethree months ended June 30, 2009, was $12.9 million, or $0.08 per dilutedshare, compared to $21.7 million, or $0.13 per diluted share for the comparableperiod in 2008.

 

***Segment Results***

 

***Revenue***

 

The following tablepresents revenue, change in revenue and revenue growth by reportable segmentfor the three months ended June 30, 2009 and 2008 (dollars in millions):

 
| ** **                               | ** ** | **2009** | ** **  | **2008** | ** ** | **Dollar Change** | ** ** | **Percentage  Change** | ** **  |
|------------------------------------------|------------|----------|-------------|----------|------------|-------------------|------------|------------------------|-------------|
| Scientific  Instruments                  |       | $        |  241.3 |     | $          |  303.0       |       | $                      |  (61.7 | ) | (20.4 | )% |
| Energy and  Superconducting Technologies |       | 13.7     |        | 12.5     |       | 1.2               |       | 9.6                    | %           |
| Eliminations (a)                         |       | (2.5     | )           | (4.0     | )          | 1.5               |       |                   |        |
|                                     |       | $        |  252.5 |     | $          |  311.5       |       | $                      |  (59.0 | ) | (18.9 | )% |

 

----

(a) Representsproduct and service revenue between reportable segments.

 

***Scientific Instruments Segment Revenues***

 

Scientific Instrumentssegment revenue decreased by $61.7 million, or 20.4%, to$241.3 million for the three months ended June 30, 2009, compared to$303.0 million for the comparable period in 2008. Included in this changein revenue is approximately $22.4 million from the impact of foreignexchange. Excluding the effect of foreign exchange, revenue decreased by 13.0%.The decrease in revenue, excluding the effect of foreign exchange, is relatedprimarily to decreased sales volume of magnetic resonance systems and X-ray andspark-OES products. The decrease in revenue was offset, in part, by highervolumes of mass spectrometry systems. The mix of products sold in theScientific Instruments segment is consistent with the trend in revenue over theprevious four quarters and continues to reflect lower demand from industrialcustomers offset by increased demand from 

 

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academic and governmentcustomers.

 

System revenue andaftermarket revenue as a percentage of total Scientific Instruments segmentrevenue were as follows during the three months ended June 30, 2009 and2008 (dollars in millions):

 
| ** **           | ** ** | **2009**    | ** **  | **2008**                            | ** ** |
|----------------------|------------|-------------|-------------|-------------------------------------|------------|
| ** **           | ** ** | **Revenue** | ** **  | **Percentage of  Segment  Revenue** | ** ** | **Revenue** | ** ** | **Percentage of  Segment  Revenue** | ** ** |
| System revenue       |       | $           |  191.3 |                                | 79.3       | % | $ |  249.6 |   | 82.4 | % |
| Aftermarket  revenue |       | 50.0        |        | 20.7                                | %          | 53.4 |   | 17.6 | % |
| Total revenue        |       | $           |  241.3 |                                | 100.0      | % | $ |  303.0 |   | 100.0 | % |

 

System revenues in theScientific Instruments segment include X-ray systems, nuclear magneticresonance systems, magnetic resonance imaging systems, electron paramagneticresonance systems, mass spectrometry systems, CBRN detection systems andmolecular spectroscopy systems. Aftermarket revenues in the ScientificInstruments segment include accessory sales, consumables, training andservices.

 

***Energy and Supercon Technologies******Segment Revenues***

 

Energy and SuperconTechnologies segment revenue increased by $1.2 million, or 9.6%, to$13.7 million for the three months ended June 30, 2009, compared to$12.5 million for the comparable period in 2008. Included in this changein revenue is a reduction of approximately $2.0 million from the impact offoreign exchange. Excluding the effect of foreign exchange, revenue increasedby 25.6%. The increase in revenue, excluding the effect of foreign exchange, isattributable to the acquisition of the research instruments business of ACCELInstruments GmbH from Varian Medical Systems, Inc., which contributedapproximately $5.0 million of revenue in the second quarter of 2009.

 

System and wire revenueand aftermarket revenue as a percentage of total Energy and SuperconTechnologies segment revenue were as follows during the three months ended June 30,2009 and 2008 (dollars in millions):

 
| ** **               | ** ** | **2009**    | ** ** | **2008**                            | ** ** |
|--------------------------|------------|-------------|------------|-------------------------------------|------------|
| ** **               | ** ** | **Revenue** | ** ** | **Percentage of  Segment  Revenue** | ** ** | **Revenue** | ** ** | **Percentage of  Segment  Revenue** | ** ** |
| System and wire  revenue |       | $           |  13.3 |                                | 97.1       | % | $ |  11.5 |   | 92.0 | % |
| Aftermarket  revenue     |       | 0.4         |       | 2.9                                 | %          | 1.0 |   | 8.0 | % |
| Total revenue            |       | $           |  13.7 |                                | 100.0      | % | $ |  12.5 |   | 100.0 | % |

 

System and wire revenuesin the Energy and Supercon Technologies segment include low and hightemperature superconducting wire and electron and ion linear accelerators,superconducting and normal conducting accelerator cavities, insertion devices,superconducting fault current limiters, other accelerator components andspecialty superconducting magnets for physics and energy research and a varietyof other scientific applications. Aftermarket revenues in the Energy andSupercon Technologies segment include services and accessory sales.

 

***Income (Loss) from Operations***

 

The following tablepresents income (loss) from operations and operating margins on revenue by reportablesegment for the three months ended June 30, 2009 and 2008 (dollars inmillions):

 
| ** **                               | ** ** | **2009**              | ** ** | **2008**                            | ** ** |
|------------------------------------------|------------|-----------------------|------------|-------------------------------------|------------|
| ** **                               | ** ** | **Operating  Income** | ** ** | **Percentage of  Segment  Revenue** | ** ** | **Operating  Income** | ** ** | **Percentage of  Segment  Revenue** | ** ** |
| Scientific  Instruments                  |       | $                     |  20.4 |                                | 8.5        | % | $ |  29.5 |   | 9.7 | % |
| Energy and  Superconducting Technologies |       | (0.7                  | )          | (5.1                                | )%         | (1.3 | ) | (10.4 | )% |
| Corporate,  eliminations and other (a)   |       | 0.5                   |       |                                |       | 0.2 |   |   |   |
| Total operating  income                  |       | $                     |  20.2 |                                | 8.0        | % | $ |  28.4 |   | 9.1 | % |

 

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(a) Representscorporate costs and eliminations not allocated to the reportable segments

 

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Scientific Instrumentssegment income from operations for the three months ended June 30, 2009was $20.4 million, resulting in an operating margin of 8.5%, compared toincome from operations of $29.5 million, resulting in an operating marginof 9.7%, for the comparable period in 2008.

 

Income from operations inthe Scientific Instruments segment decreased as a result of the lower revenuesdescribed above. The decrease in gross profit was offset, in part, by loweroperating expenses. In the second quarter of 2009 our gross profit margin as apercentage of revenue increased to 45.4% compared to 42.1% for the comparableperiod in 2008. The improvement in gross profit margins as a percentage ofrevenue is a function of product mix and reflects higher margins on newlyintroduced mass spectrometry products. In addition, productivity improvements,the benefits of cost cutting initiatives and changes in foreign currencyexchange rates also contributed to the improvement in gross profit margins as apercentage of revenue. The decrease in operating expenses is attributable tochanges in foreign currency exchange rates and cost savings programsimplemented in the second half of 2008.

 

Energy and SuperconTechnologies segment loss from operations for the three months ended June 30,2009 was $0.7 million, resulting in an operating margin of (5.1)%,compared to a loss from operations of $1.3 million, resulting in anoperating margin of (10.4)%, for the comparable period in 2008.

 

Loss from operations inthe Energy and Supercon Technologies segment in the second quarter of 2009included a bargain purchase gain of $2.1 million recorded in connection withthe acquisition of the RI business offset, in part, by $0.4 million oftransaction costs incurred in connection with the acquisition of the RIbusiness and $0.7 million of impairment charges associated with certain fixedassets used in the production of certain superconducting wire. Excluding theeffect of these acquisition-related charges, loss from operations increased by$0.4 million for the three months ended June 30, 2009 compared to thecomparable period in 2008. The increase in the loss from operations resultedfrom higher research and development costs.

 

***Six Months Ended June 30, 2009 Compared to the SixMonths Ended June 30, 2008***

 

***Consolidated Results***

 

The following tablepresents our results for the six months ended June 30, 2009 and 2008(dollars in millions):

 

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| ** **                                                                                        | ** ** | **Six Months Ended  June 30,** | ** **  |
|---------------------------------------------------------------------------------------------------|------------|-------------------------------------|-------------|
| ** **                                                                                        | ** ** | **2009**                            | ** **  | **2008** | ** ** |
| Product  revenue                                                                                  |       | $                                   |  425.1 |   | $ |  488.6 |   |
| Service  revenue                                                                                  |       | 55.2                                |        | 58.9 |   |
| Other  revenue                                                                                    |       | 2.7                                 |        | 2.3 |   |
| Total  revenue                                                                                    |       | 483.0                               |        | 549.8 |   |
|                                                                                              |       |                                |        |   |   |
| Cost  of product revenue                                                                          |       | 236.9                               |        | 267.7 |   |
| Cost  of service revenue                                                                          |       | 32.2                                |        | 38.5 |   |
| Total  cost of revenue                                                                            |       | 269.1                               |        | 306.2 |   |
| Gross  profit                                                                                     |       | 213.9                               |        | 243.6 |   |
|                                                                                              |       |                                |        |   |   |
| Operating  expenses:                                                                              |       |                                |        |   |   |
| Sales  and marketing                                                                              |       | 86.5                                |        | 91.5 |   |
| General  and administrative                                                                       |       | 33.3                                |        | 34.0 |   |
| Research  and development                                                                         |       | 60.2                                |        | 67.7 |   |
| Acquisition-related  charges (credits), net                                                       |       | (0.6                                | )           | 6.2 |   |
| Total  operating expenses                                                                         |       | 179.4                               |        | 199.4 |   |
| Operating  income                                                                                 |       | 34.5                                |        | 44.2 |   |
|                                                                                              |       |                                |        |   |   |
| Interest  and other income (expense), net                                                         |       | (2.8                                | )           | (8.6 | ) |
| Income  before income tax provision and noncontrolling interest in consolidated  subsidiaries     |       | 31.7                                |        | 35.6 |   |
| Income  tax provision                                                                             |       | 10.4                                |        | 14.5 |   |
| Consolidated  net income                                                                          |       | 21.3                                |        | 21.1 |   |
| Less:  net income attributable to noncontrolling interests                                        |       | —                              |        | 0.2 |   |
| Net  income attributable to Bruker Corporation                                                    |       | $                                   |  21.3  |   | $ |  20.9 |   |
|                                                                                              |       |                                |        |   |   |
| Net  income per common share attributable to Bruker Corporation shareholders -  basic and diluted |       | $                                   |  0.13  |   | $ |  0.13 |   |
|                                                                                              |       |                                |        |   |   |
| Weighted  average common shares outstanding:                                                      |       |                                |        |   |   |
| Basic                                                                                             |       | 163.3                               |        | 162.4 |   |
| Diluted                                                                                           |       | 164.5                               |        | 165.3 |   |

 

***Revenue***

 

Our revenue decreased by$66.8 million, or 12.2%, to $483.0 million for the six months ended June 30,2009, compared to $549.8 million for the comparable period in 2008. Included inthis change in revenue is approximately $43.0 million from the impact offoreign exchange. Excluding the effect of foreign exchange, revenue decreasedby 4.4%. The decrease in revenue, excluding the effect of foreign exchange, isattributable to the Scientific Instruments segment and is related primarily todecreased sales volume of magnetic resonance systems and X-ray and spark-OESproducts. The decrease in revenue was offset, in part, by higher volumes ofmass spectrometry systems. The mix of products sold in the ScientificInstruments segment is consistent with the trend in revenue over the previousfour quarters and continues to reflect lower demand from industrial customerspartially offset by increased demand from academic and government customers.

 

***Cost of Revenue***

 

Our cost of product andservice revenue for the six months ended June 30, 2009, was $269.1million, resulting in a gross profit margin of 44.3%, compared to cost ofproduct and service revenue of $306.2 million, resulting in a

 

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gross profit margin of44.3%, for the comparable period in 2008. Lower gross profits were driven bylower revenues. Gross profit margin as a percentage of revenue is a function ofproduct mix and reflects higher margins on newly introduced mass spectrometryproducts offset by pricing pressure that continues to be a factor with certainproduct lines. Productivity improvements, the benefits of cost cutting initiativesand changes in foreign currency exchange rates also contributed to maintainingthe gross profit margins despite a decrease in revenue.

 

***Sales and Marketing***

 

Our sales and marketingexpense for the six months ended June 30, 2009 decreased to $86.5 million,or 18.0% of product and service revenue, from $91.5 million, or 16.7% ofproduct and service revenue, for the comparable period in 2008. The decrease insales and marketing expense is attributable mainly to changes in foreigncurrency exchange rates, primarily the Euro. Additionally, we have started torealize the benefits from certain cost cutting initiatives, but the savingswere partially offset by selling and marketing efforts associated with a numberof recently introduced products.

 

***General and Administrative***

 

Our general andadministrative expense for the six months ended June 30, 2009 was $33.3million, or 6.9% of product and service revenue, and was essentially flatcompared with general and administrative expense of $34.0 million, or 6.2% of productand service revenue, for the comparable period in 2008.

 

***Research and Development***

 

Our research anddevelopment expense for the six months ended June 30, 2009 decreased to$60.2 million, or 12.5% of product and service revenue, from $67.7 million, or12.4% of product and service revenue, for the comparable period in 2008. Thedecrease in research and development expense is attributable mainly to changesin foreign currency exchange rates, primarily the Euro, as a majority of ourresearch and development is performed in Europe. Additionally, we have startedto realize the benefits from certain cost cutting initiatives, but the savingswere partially offset by investments in a number of new products and applicationsscheduled to be released in the next six to twelve months.

 

***Acquisition-Related Charges (Credits), Net***

 

Acquisition-relatedcredits of $(0.6) million in the first half of 2009 relate entirely to theEnergy and Supercon Technologies segment and include a bargain purchase gain of$2.1 million recorded in connection with the acquisition of the RI businessfrom Varian Medical Systems, Inc. offset, in part, by $0.8 million oftransaction costs incurred in connection with the acquisition of the RIbusiness and $0.7 million of impairment charges associated with certain fixedassets used in the production of certain superconducting wire.

 

Acquisition-relatedcharges in the first half of 2008 relate entirely to the Scientific Instrumentssegment and consist of $6.2 million of transaction costs incurred in connectionwith the acquisition of Bruker BioSpin. The acquisition of Bruker BioSpinrepresented a combination of companies under common control due to a majorityof ownership of both Bruker Corporation and Bruker BioSpin by the sameindividuals and, as a result, transaction costs were expensed as incurred.

 

***Interest and Other Income (Expense), Net***

 

Interest and other income(expense), net during the six months ended June 30, 2009 was $(2.8)million, compared to $(8.6) million for the comparable period of 2008.

 

During the six monthsended June 30, 2009, the major components within interest and other income(expense), net were net interest expense of $3.6 million offset, in part,by realized and unrealized gains on foreign currency transactions of$0.6 million. During the six months ended June 30, 2008, the majorcomponent within interest and other income (expense), net, was realized andunrealized losses on foreign currency transactions of $9.0 million and netinterest expense of $2.1 million offset, in part, by other income of$2.5 million. Losses on foreign currency

 

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transactions in the firsthalf of 2008 resulted from the re-measurement of certain foreign currencydenominated assets, principally cash, inter-company receivables and ashort-term inter-company loan into the functional currency of the affectedentities.

 

***Income Tax Provision***

 

Our effective tax rategenerally reflects our tax provision for non-U.S. entities only since nobenefit was recognized for losses incurred in the U.S. We will maintain a fullvaluation allowance for our U.S. net operating losses and tax credits untilevidence exists that it is more likely than not that the loss carryforward andcredit amounts will be utilized to offset U.S. taxable income. Our tax rate maychange over time as the amount and mix of income and taxes outside the U.S.changes. The effective tax rate is calculated using our projected annualpre-tax income or loss and is affected by tax credits, the expected level ofother tax benefits, and the impact of changes to the valuation allowance, aswell as changes in the mix of our pre-tax income and losses among jurisdictionswith varying statutory tax rates and credits.

 

The income tax provisionfor the six months ended June 30, 2009, was $10.4 million compared to anincome tax provision of $14.5 million for the six months ended June 30,2008, representing effective tax rates of 32.8% and 40.7%, respectively. Thechange in our effective tax rate relates primarily to the amount and mix ofincome and taxes outside the U.S. However, in addition to the amount and mix ofincome and taxes outside the U.S., our income tax provision in the firstquarter of 2008 was negatively impacted by acquisition-related charges andforeign exchange losses that did not result in significant tax benefits becausethey were incurred primarily either in the U.S. or in foreign locations withrelatively low tax rates.

 

***Net Income Attributable to NoncontrollingInterests***

 

Net income attributableto noncontrolling interests for the six months ended June 30, 2009 was$0.0 million compared to $0.2 million for the comparable period of 2008. Netincome attributable to noncontrolling interests represents the minorityshareholders’ proportionate share of the net income recorded by fourmajority-owned indirect subsidiaries, Bruker Baltic Ltd., InCoaTec GmbH andPerch Solutions OY which are included in the Scientific Instruments segment,and RI Research Instruments GmbH which is included in the Energy and SuperconTechnologies segment.

 

***Net Income Attributable to BrukerCorporation***

 

Our net income for thesix months ended June 30, 2009, was $21.3 million, or $0.13 per dilutedshare, compared to $20.9 million, or $0.13 per diluted share for the comparableperiod in 2008.

 

***Segment Results***

 

***Revenue***

 

The following tablepresents revenue, change in revenue and revenue growth by reportable segmentfor the six months ended June 30, 2009 and 2008 (dollars in millions):

 
| ** **                               | ** ** | **2009** | ** **  | **2008** | ** ** | **Dollar Change** | ** ** | **Percentage  Change** | ** **  |
|------------------------------------------|------------|----------|-------------|----------|------------|-------------------|------------|------------------------|-------------|
| Scientific  Instruments                  |       | $        |  464.9 |     | $          |  533.5       |       | $                      |  (68.6 | ) | (12.9 | )% |
| Energy  and Superconducting Technologies |       | 21.8     |        | 22.4     |       | (0.6              | )          | (2.7                   | )%          |
| Eliminations  (a)                        |       | (3.7     | )           | (6.1     | )          | 2.4               |       |                   |        |
|                                     |       | $        |  483.0 |     | $          |  549.8       |       | $                      |  (66.8 | ) | (12.1 | )% |

 

----

(a) Representsproduct and service revenue between reportable segments.

 

***Scientific Instruments Segment Revenues***

 

Scientific Instrumentssegment revenue decreased by $68.6 million, or 12.9%, to $464.9 millionfor the six months ended June 30, 2009, compared to $533.5 millionfor the comparable period in 2008. Included in this change

 

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in revenue isapproximately $39.7 million from the impact of foreign exchange. Excludingthe effect of foreign exchange, revenue decreased by 5.4%. The decrease inrevenue, excluding the effect of foreign exchange, is related primarily todecreased sales volume of magnetic resonance systems and X-ray and spark-OESproducts. The decrease in revenue was offset, in part, by higher volumes ofmass spectrometry systems. The mix of products sold in the ScientificInstruments segment is consistent with the trend in revenue over the previousfour quarters and continues to reflect lower demand from industrial customersoffset by increased demand from academic and government customers.

 

System revenue andaftermarket revenue as a percentage of total Scientific Instruments segmentrevenue were as follows during the six months ended June 30, 2009 and 2008(dollars in millions):

 
| ** **           | ** ** | **2009**    | ** **  | **2008**                            | ** ** |
|----------------------|------------|-------------|-------------|-------------------------------------|------------|
| ** **           | ** ** | **Revenue** | ** **  | **Percentage of  Segment  Revenue** | ** ** | **Revenue** | ** ** | **Percentage of  Segment  Revenue** | ** ** |
| System  revenue      |       | $           |  367.8 |                                | 79.1       | % | $ |  426.3 |   | 79.9 | % |
| Aftermarket  revenue |       | 97.1        |        | 20.9                                | %          | 107.2 |   | 20.1 | % |
| Total  revenue       |       | $           |  464.9 |                                | 100.0      | % | $ |  533.5 |   | 100.0 | % |

 

System revenues in theScientific Instruments segment include X-ray systems, nuclear magneticresonance systems, magnetic resonance imaging systems, electron paramagneticresonance systems, mass spectrometry systems, CBRN detection systems andmolecular spectroscopy systems. Aftermarket revenues in the ScientificInstruments segment include accessory sales, consumables, training andservices.

 

***Energy and Supercon Technologies******Segment Revenues***

 

Energy and SuperconTechnologies segment revenue decreased by $0.6 million, or 2.7%, to$21.8 million for the six months ended June 30, 2009, compared to$22.4 million for the comparable period in 2008. Included in this changein revenue is approximately $3.3 million from the impact of foreignexchange. Excluding the effect of foreign exchange, revenue increased by 12.1%.The increase in revenue, excluding the effect of foreign exchange, isattributable to the acquisition of the research instruments business of ACCELInstruments GmbH from Varian Medical Systems, Inc., which contributedapproximately $5.0 million of revenue in the second quarter of 2009.

 

System and wire revenueand aftermarket revenue as a percentage of total Energy and SuperconTechnologies segment revenue were as follows during the six months ended June 30,2009 and 2008 (dollars in millions):

 
| ** **               | ** ** | **2009**    | ** ** | **2008**                            | ** ** |
|--------------------------|------------|-------------|------------|-------------------------------------|------------|
| ** **               | ** ** | **Revenue** | ** ** | **Percentage of  Segment  Revenue** | ** ** | **Revenue** | ** ** | **Percentage of  Segment  Revenue** | ** ** |
| System  and wire revenue |       | $           |  20.9 |                                | 95.9       | % | $ |  20.4 |   | 91.1 | % |
| Aftermarket  revenue     |       | 0.9         |       | 4.1                                 | %          | 2.0 |   | 8.9 | % |
| Total  revenue           |       | $           |  21.8 |                                | 100.0      | % | $ |  22.4 |   | 100.0 | % |

 

 

System and wire revenuesin the Energy and Supercon Technologies segment include low and hightemperature superconducting wire and electron and ion linear accelerators,superconducting and normal conducting accelerator cavities, insertion devices, superconductingfault current limiters, other accelerator components and specialty superconductingmagnets for physics and energy research and a variety of other scientificapplications. Aftermarket revenues in the Energy and Supercon Technologiessegment include services and accessory sales.

 

***Income (Loss) from Operations***

 

The following tablepresents income (loss) from operations and operating margins on revenue byreportable segment for the six months ended June 30, 2009 and 2008(dollars in millions):

 

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| ** **                               | ** ** | **2009**              | ** ** | **2008**                            | ** ** |
|------------------------------------------|------------|-----------------------|------------|-------------------------------------|------------|
| ** **                               | ** ** | **Operating  Income** | ** ** | **Percentage of  Segment  Revenue** | ** ** | **Operating  Income** | ** ** | **Percentage of  Segment  Revenue** | ** ** |
| Scientific  Instruments                  |       | $                     |  36.5 |                                | 7.9        | % | $ |  47.7 |   | 8.9 | % |
| Energy  and Superconducting Technologies |       | (3.1                  | )          | (14.2                               | )%         | (3.7 | ) | (16.5 | )% |
| Corporate,  eliminations and other (a)   |       | 1.1                   |       |                                |       | 0.2 |   |   |   |
| Total  operating income                  |       | $                     |  34.5 |                                | 7.1        | % | $ |  44.2 |   | 8.0 | % |

 

----

(a) Represents corporate costs and eliminationsnot allocated to the reportable segments

 

Scientific Instrumentssegment income from operations for the six months ended June 30, 2009 was$36.5 million, resulting in an operating margin of 7.9%, compared toincome from operations of $47.7 million, resulting in an operating marginof 8.9%, for the comparable period in 2008.

 

Income from operations inthe Scientific Instruments segment decreased as a result of the lower revenuesdescribed above. The decrease in gross profit was offset, in part, by loweroperating expenses. In the first half of 2009 our gross profit margin as apercentage of revenue increased to 45.4% compared to 45.1% for the comparableperiod in 2008. The improvement in gross profit margins as a percentage ofrevenue is a function of product mix and reflects higher margins on newlyintroduced mass spectrometry products. In addition, productivity improvements,the benefits of cost cutting initiatives and changes in foreign currencyexchange rates also contributed to the improvement in gross profit margins as apercentage of revenue. The decrease in operating expenses is attributable tochanges in foreign currency exchange rates and cost savings programsimplemented in the second half of 2008.

 

Energy and SuperconTechnologies segment loss from operations for the six months ended June 30,2009 was $3.1 million, resulting in an operating margin of (14.2)%,compared to a loss from operations of $3.7 million, resulting in anoperating margin of (16.5)%, for the comparable period in 2008.

 

Loss from operations inthe Energy and Supercon Technologies segment in the first half of 2009 includeda bargain purchase gain of $2.1 million recorded in connection with theacquisition of the RI business offset, in part, by $0.8 million of transactioncosts incurred in connection with the acquisition of the RI business and $0.7million of impairment charges associated with certain fixed assets used in theproduction of certain superconducting wire. Excluding the effect of theseacquisition-related charges, loss from operations was essentially unchanged forthe first half of 2009 compared to the first half of 2008.

 

**LIQUIDITYAND CAPITAL RESOURCES**

 

We currently anticipatethat our existing cash and credit facilities will be sufficient to support ouroperating and investing needs for at least the next twelve months, but thisdepends on our profitability and our ability to manage working capitalrequirements. Our future cash requirements will also be affected byacquisitions that we may make in the future. Historically, we have financed ourgrowth through a combination of debt financings and issuances of common stock.In the future, there can be no assurances that additional financingalternatives will be available to us if required, or if available, will beobtained on terms favorable to us.

 

During the six months endedJune 30, 2009, net cash provided by operating activities was $51.3million, resulting primarily from $21.3 million of net income and $17.8 millionof net changes in working capital. During the six months ended June 30,2008, net cash provided by operating activities was $18.1 million,resulting primarily from $21.1 million of net income.

 

During the six monthsended June 30, 2009, net cash used by investing activities was$8.7 million, compared to net cash used by investing activities of$28.0 million during the six months ended June 30, 2008. Cash used byinvesting activities during the six months ended June 30, 2009 wasattributable primarily to $7.1 million of capital expenditures and$1.1 million used for acquisitions. Cash used by investing activitiesduring the six months ended June 30, 2008 was attributable primarily to$27.1 million of capital expenditures. The decrease in capitalexpenditures during the six months ended June 30, 2009 comparedto 2008 related primarily to the expansion of our facility in Ettlingen,Germany, which was completed in the third quarter of 2008.

 

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During the six monthsended June 30, 2009, net cash used by financing activities was$51.6 million, compared to net cash used by financing activities of$217.5 million during the six months ended June 30, 2008. Cash usedby financing activities during the six months ended June 30, 2009 wasattributable to $51.7 million of net debt repayments under variouslong-term and short-term arrangements. Cash used by financing activities duringthe six months ended June 30, 2008 was attributable to $386.0 million paidto certain shareholders of Bruker BioSpin in connection with the acquisitionand $23.4 million of withholding taxes paid in connection with a dividenddeclared by Bruker BioSpin prior to the acquisition. These uses were offset, inpart, by $193.4 million of net borrowings related primarily to the CreditAgreement.

 

At June 30, 2009, wehad outstanding debt totaling $170.7 million consisting of $161.1 millionoutstanding under the Credit Agreement, including $138.8 millionoutstanding under a term loan and $22.3 million under revolving loans,$4.1 million outstanding under other long-term debt arrangements,$0.6 million outstanding under other revolving lines of credit and$4.9 million under capital lease obligations. At June 30, 2009, weclassified the $22.3 million borrowed under the revolving credit line ofthe Credit Agreement as short-term because we expect to repay this amount inthe next twelve months. At December 31, 2008, we had outstanding debttotaling $223.8 million consisting of $196.5 million outstandingunder the Credit Agreement, including $144.4 million drawn on a term loanand $52.1 million under revolving loans, $15.8 million outstandingunder other long-term debt arrangements, $6.2 million outstanding underother revolving lines of credit and $5.3 million under capital leaseobligations. At December 31, 2008, we classified $35.6 million of the$52.1 million borrowed under the revolving credit line of the CreditAgreement as long-term because of our expectation that we would not repay thisamount in the next twelve months.

 

On February 26,2008, we completed our acquisition of Bruker BioSpin for $914.0 million.The acquisition of Bruker BioSpin was financed with 57,544,872 shares ofunregistered common stock valued at $526.0 million based on the trailing10-day trading average closing price of $9.14 per share as of two days prior tothe signing of the transaction agreements, $351.0 million of cash obtainedunder a new credit facility, which we refer to as the Credit Agreement, and thebalance with cash on hand. The Credit Agreement, which is with a syndication oflenders, provides for a revolving credit line with a maximum commitment of$230.0 million and a term loan facility of $150.0 million. Theoutstanding principal under the term loan is payable in quarterly installmentsthrough December 2012. Borrowings under the Credit Agreement bearinterest, at our option, at either (i) the higher of the prime rate or thefederal funds rate plus 0.50%, or (ii) adjusted LIBOR, plus marginsranging from 0.40% to 1.25% and a facility fee ranging from 0.10% to 0.20%. Asof June 30, 2009, the weighted average interest rate of borrowings underthe term facility of the Credit Agreement was approximately 2.8%.

 

Borrowings under theCredit Agreement are secured by the pledge to the banks of 100% of the capitalstock of each of our wholly-owned domestic subsidiaries and 65% of the capitalstock of certain of our wholly-owned direct or indirect foreign subsidiaries.The Credit Agreement also requires that we maintain certain financial ratiosrelated to maximum leverage and minimum interest coverage, as defined in theCredit Agreement. In addition to the financial ratios, the Credit Agreementrestricts, among other things, our ability to do the following: make certainpayments; incur additional debt; incur certain liens; make certain investments,including derivative agreements; merge, consolidate, sell or transfer all orsubstantially all of our assets; and enter into certain transactions withaffiliates. As of June 30, 2009, the latest measurement date, we were incompliance with the covenants of the Credit Agreement.

 

Other long-term debtarrangements at June 30, 2009 include both collateralized anduncollateralized arrangements with various financial institutions in Germanyand are at fixed and variable interest rates ranging from 2.7% to 8.0% at June 30,2009. The term of these arrangements are through various dates between 2010 and2013.

 

Other revolving loans arewith various financial institutions primarily in Germany, Japan and France. Thefollowing is a summary of the maximum commitments and net amounts available tothe Company under revolving loans as of June 30, 2009 (in millions):

 

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| ** **             | ** ** | **Weighted  Average  Interest Rate** | ** ** | **Total Amount  Committed by  Lenders** | ** **  | **Outstanding  Borrowings** | ** ** | **Outstanding  Letters of  Credit** | ** ** | **Total Amount  Available** | ** ** |
|------------------------|------------|--------------------------------------|------------|-----------------------------------------|-------------|-----------------------------|------------|-------------------------------------|------------|-----------------------------|------------|
| Credit  Agreement      |       | 0.8                                  | %          | $                                       |  230.0 |                        | $          |  22.3                          |       | $                           |  1.4  |   | $ |  206.3 |   |
| Other  revolving loans |       | 4.9                                  | %          | 66.4                                    |        | 0.6                         |       | 52.3                                |       | 13.5                        |       |
| Total  revolving loans |       | 0.9                                  | %          | $                                       |  296.4 |                        | $          |  22.9                          |       | $                           |  53.7 |   | $ |  219.8 |   |

 

As of June 30, 2009,we have approximately $6.0 million of net operating loss carryforwardsavailable to reduce future U.S. taxable income. These losses have variousexpiration dates through 2028. The Company also has approximately $45.3 millionof German Trade Tax net operating losses that are carried forward indefinitelyand U.S. tax credits of approximately $19.4 million available to offset futuretax liabilities that expire at various dates. U.S. tax credits include foreigntax credits of $17.6 million expiring in various years through 2018 andresearch and development tax credits of $1.8 million expiring at variousdates through 2025. These operating losses and tax credit carryforwards may besubject to limitations under provisions of the Internal Revenue Code.

 

The following tablesummarizes maturities for our significant financial obligations as of June 30,2009 (in millions):

 
| **Contractual Obligations**                | ** ** | **Total** | ** ** | **Less than 1  Year** | ** ** | **1-3 Years** | ** ** | **4-5 Years** | ** **   | **More than 5  Years** | ** ** |
|--------------------------------------------|------------|-----------|------------|-----------------------|------------|---------------|------------|---------------|--------------|------------------------|------------|
| Revolving  lines of credit                 |       | $         |  22.9 |                  | $          |  22.9    |       | $             |  — |                   | $          |  — |   | $ |  — |   |
| Long-term  debt, including current portion |       | 147.8     |       | 20.2                  |       | 67.9          |       | 59.7          |         | —                 |       |
| Uncertain  tax contingencies               |       | 21.8      |       | —                |       | 21.8          |       | —        |         | —                 |       |
|                                            |            |           |            |                       |            |               |            |               |              |                        |            |  |  |  |  |  |

 

Uncertain taxcontingencies are positions taken or expected to be taken on an income taxreturn that may result in additional payments to tax authorities. The totalamount of uncertain tax contingencies is included in the “1-3 Years” column aswe are not able to reasonably estimate the timing of potential future payments.If a tax authority agrees with the tax position taken or expected to be takenor the applicable statute of limitations expires, then additional payments willnot be necessary.

 

**RECENTACCOUNTING PRONOUNCEMENTS**

 

In June 2009, theFinancial Accounting Standards Board (“FASB”) issued Statement of FinancialAccounting Standards (“SFAS”) No. 168, The FASB Standards Codification andthe Hierarchy of Generally Accepted Accounting Principles — a replacement ofFASB Statement 162 (“SFAS No. 168”). SFAS No. 168 is effective forfiscal years, and interim periods, ending after September 15, 2009. SFAS No. 168is intended to improve financial reporting by identifying the *FASB Accounting Standards Codification*andrules and interpretive releases of the Securities and Exchange Commission(“SEC”) under authority of federal securities laws as the sole sources ofauthoritative accounting principles to be used in preparing financialstatements that are presented in conformity with accounting principlesgenerally accepted in the United States of America for SEC registrants. Theadoption of SFAS No. 168 is not expected to have a material impact on ourresults of operations, financial position or cash flows.

 

In December 2008,the FASB issued Staff Position No. 132(R)-1,*Employers’ Disclosures about Postretirement Benefit Plan Assets*(“FSP 132(R)-1”). FSP 132(R)-1 requires detailed disclosures regarding theinvestment strategies, fair value measurements, and concentrations of risk ofplan assets of a defined benefit pension or other postretirement plan. FSP132(R)-1 is effective for fiscal years ending after December 15, 2009 andwill be applied prospectively. We are currently assessing the impact that FSP132(R)-1 will have on our results of operations and financial position.

 
| **ITEM 3.** | **QUANTITATIVE  AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK** |
|-------------|-----------------------------------------------------------------|

 

We are potentiallyexposed to market risks associated with changes in foreign exchange rates andinterest rates. We selectively use financial instruments to reduce these risks.All transactions related to risk management techniques are authorized andexecuted pursuant to our policies and procedures. Analytical techniques used tomanage and monitor foreign exchange and interest rate risk include marketvaluations and sensitivity analysis.

 

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***Impact of Foreign Currencies***

 

We generate a substantialportion of our revenues in international markets, principally Europe and Japan,which subjects our operations to the exposure of exchange rate fluctuations.The impact of currency exchange rate movement can be positive or negative inany period. Our costs related to sales in foreign currencies are largelydenominated in the same respective currencies, limiting our transaction riskexposure. However, for sales not denominated in U.S. Dollars, if there is anincrease in the rate at which a foreign currency is exchanged for U.S. Dollars,it will require more of the foreign currency to equal a specified amount ofU.S. Dollars than before the rate increase. In such cases, if we price ourproducts in the foreign currency, we will receive less in U.S. Dollars than wedid before the rate increase went into effect. If we price our products in U.S.Dollars and competitors price their products in local currency, an increase inthe relative strength of the U.S. Dollar could result in our prices not being competitivein a market where business is transacted in the local currency.

 

Our foreign exchangegains (losses), net were $0.6 million and $(9.0) million for the sixmonths ended June 30, 2009 and 2008, respectively. From time to time, wehave entered into foreign currency contracts in order to minimize thevolatility that fluctuations in exchange rates have on our cash flows relatedto purchases and sales denominated in foreign currencies. We will continue toevaluate our currency risks and in the future may utilize foreign currencycontracts more frequently as part of a transactional hedging program.

 

***Impact of Interest Rates***

 

We regularly investexcess cash in short-term investments that are subject to changes in interestrates. We believe that the market risk arising from holding these financialinstruments is minimal.

 

Our exposure related toadverse movements in interest rates is derived primarily from outstandingfloating rate debt instruments that are indexed to short-term market rates. Ourobjective in managing our exposure to interest rates is to decrease thevolatility that changes in interest rates might have on our earnings and cashflows. To achieve this objective we entered into interest rate swaps and crosscurrency rate swaps in order to minimize the volatility that changes ininterest rates might have on earnings and cash flows. A 10% increase ordecrease in the average cost of our variable rate debt would not result in amaterial change in pre-tax interest expense.

 

In April 2008, weentered into an interest rate swap arrangement to pay a fixed rate ofapproximately 3.8% and receive a variable rate based on three month LIBORthrough December 31, 2012. The initial notional amount of this interestswap was $90.0 million and amortizes in proportion to the term debtcomponent of our Credit Agreement. At June 30, 2009, the outstandingnotional amount of this swap was $83.3 million. We have determined that thisswap is an effective hedge of the variability of cash flows of the interestpayments.

 

***Inflation***

 

We do not believeinflation had a material impact on our business or operating results during anyof the periods presented.

 
| **ITEM 4.** | **CONTROLS  AND PROCEDURES** |
|-------------|------------------------------|

 

We have establisheddisclosure controls and procedures that are designed to ensure that materialinformation relating to us, including our consolidated subsidiaries, is madeknown to our Chief Executive Officer (principal executive officer) and ChiefFinancial Officer (principal financial officer) by others within ourorganization. Under the supervision and with the participation of ourmanagement, including our Chief Executive Officer and Chief Financial Officer,we conducted an evaluation of the effectiveness of our disclosure controls andprocedures as of June 30, 2009. Based on this evaluation, our ChiefExecutive Officer and Chief Financial Officer concluded that our disclosurecontrols and procedures were effective, as of June 30, 2009, to ensurethat the information required to be disclosed by us in the reports that we fileor submit under the Securities Exchange Act of 1934 is recorded, processed,summarized and reported within the time periods specified in the SEC’s rules andforms.

 

There were no changes inour internal control over financial reporting that occurred during the quarter endedJune 30, 2009 that materially affected, or are reasonably likely toaffect, our internal control over financial reporting.

 

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| **PART II** | **OTHER  INFORMATION** |
|------------------|------------------------|
|             |                   |
| **ITEM 1.**      | **LEGAL  PROCEEDINGS** |

 

Except as set forthbelow, there have been no material changes to the legal proceedings disclosedin Part I, “Item 3. Legal Proceedings” in our Annual Report on Form 10-Kfor the year ended December 31, 2008 and our Quarterly Report on Form 10-Qfor the quarter ended March 31, 2009.

 

As previously reported, a former employee of Bruker BioSpin Corporationcontacted the Securities and Exchange Commission during 2008 in connection witha claim this employee separately brought regarding violation of Section 806of the Sarbanes-Oxley Act. The SEC first contacted counsel for the Company inearly 2008 regarding this matter and was provided various information regardingthe matter at that time. In March 2009 and May 2009, the SECcontacted counsel for the Company to request some additional informationregarding this matter. The Company has responded to these requests andcontinues to cooperate fully with the SEC regarding this matter. As previouslyreported, the Company strongly denies the allegations made by this formeremployee.  The related civil actionpending in federal court in the District of Massachusetts was settled on June4, 2009, with neither party admitting liability.  The settlement amount paid to the formeremployee was not material to the Company.

 

During the second quarter of 2009, formal mediation proceedings wereheld in an attempt to resolve the previously reported contractual disputerelating to the claimed breach of certain agreements between AgilentTechnologies, Inc., as the successor to Hewlett-Packard Company, and ourindirect subsidiary, Bruker Daltonik GmbH. The parties were unable to resolve theirdispute through the mediation process, and in July 2009 Agilentpurportedly terminated the agreements. The termination of the agreements, ifvalid, is not expected to have a material effect on the Company’s business orresults of operations.

 

As previously reported,Roenalytic GmbH, previously known as Roentgenanalytik Appartebau GmbH, (“RAA”)filed a civil proceeding in Germany against a Bruker AXS subsidiary and oneemployee and raised criminal allegations against three employees of the sameBruker AXS subsidiary in connection with alleged improper use of certain tradesecrets and other intellectual property of RAA. On June 30, 2009 RAA fileda counter action to the action for declaratory judgment brought against RAA bythe Bruker AXS subsidiary in the civil proceeding. The counter action seeksvarious remedies for the same alleged improper use of trade secrets and otherintellectual property.

 

In the related criminalproceeding, on June 2, 2009 the court issued an order regarding what itemsRAA may inspect in an attempt to prove its allegations. The court limited suchaccess to the items sought by the Bruker AXS subsidiary. The inspection iscurrently expected to occur during the third quarter of 2009.

 

The Bruker AXS subsidiarycontinues to deny all allegations made by RAA in both proceedings. The BrukerAXS subsidiary intends to continue to pursue its action for declaratoryjudgment in the civil proceeding and continue to provide legal counsel to theemployees in the criminal inquiry.

 
| **ITEM 1A.** | **RISK FACTORS** |
|--------------|------------------|

 

In addition to the otherinformation set forth in this report, you should carefully consider the factorsdiscussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-Kfor the year ended December 31, 2008, which could materially affect ourbusiness, financial condition or future results. The risks described in thisreport and in our Annual Report on Form 10-K are not the only risks facingour Company. Additional risks and uncertainties not currently known to us orthat we currently deem to be immaterial also may materially adversely affectour business, financial condition and/or operating results.

 

There have been nomaterial changes to the risk factors previously disclosed in our Annual Reporton Form 10-K for the fiscal year ended December 31, 2008.

 

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| **ITEM 2.** | **UNREGISTERED  SALES OF EQUITY SECURITIES AND USE OF PROCEEDS** |
|-------------|------------------------------------------------------------------|

 

The following table setsforth all purchases made by or on behalf of the Company or any “affiliatedpurchaser,” as defined in Rule 10b-18(a)(3) under the Exchange Act,of shares of our common stock during each month in the second quarter of 2009.

 
| **Period**                | ** ** | **Total Number of  Shares Purchased** | ** ** | **Average Price  Paid per Share** | ** **   | **Total Number of  Shares Purchased  as Part of  Publicly  Announced Plans  or Programs** | ** ** | **Maximum  Number of Shares  that May Yet Be  Purchased Under  the Plans or  Programs** | ** ** |
|---------------------------|------------|---------------------------------------|------------|-----------------------------------|--------------|-------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------|------------|
| April 1 - April  30, 2009 |       | —                                |       | $                                 |  — |                                                                                      | —     |                                                                                    | —     |   |
| May 1 - May 31,  2009     |       | 100,000                               |       | 7.28                              |         | —                                                                                    |       | —                                                                                  |       |
| June 1 - June  30, 2009   |       | —                                |       | —                            |         | —                                                                                    |       | —                                                                                  |       |
|                      |       | 100,000                               |       | $                                 |  7.28   |                                                                                      | —     |                                                                                    | —     |   |

 

All shares repurchasedwere purchased by the Company’s Chief Executive Officer, Frank H. Laukien, fromMarc M. Laukien, a 5% beneficial owner and Frank H. Laukien’s half-brother, ina privately negotiated transaction. The shares repurchased were previouslydisclosed on Forms 4 filed with the U.S. Securities and Exchange Commission.

 
| **ITEM 3.** | **DEFAULTS  UPON SENIOR SECURITIES** |
|-------------|--------------------------------------|

 

None.

 
| **ITEM 4.** | **SUBMISSION  OF MATTERS TO A VOTE OF SECURITY HOLDERS** |
|-------------|----------------------------------------------------------|

 
| (a)    |   | The Annual Meeting of  Stockholders of the Company was held on May 7, 2009.                                                                                                                                           |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                       |
| (c)    |   | Proxies representing  136,222,522 shares were received. Total shares outstanding as of the record  date were 164,067,654. The matters voted upon and the results of the voting  at the Annual Meeting are set forth below: |
|   |   |                                                                                                                                                                                                                       |
|   |   | (i)                                                                                                                                                                                                                        | To elect the following  four Class III directors, each to hold office until the 2012 Annual  Meeting: |
|   |   |                                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                       | (i) | Tony W. Keller, Ph.D. |   |   |
|   |   |                                                                                                                                                                                                                       |   | Votes  for | 119,161,981 |   |
|   |   |                                                                                                                                                                                                                       |   | Votes  withheld | 17,060,541 |   |
|   |   |                                                                                                                                                                                                                       |   |   |   |   |
|   |   |                                                                                                                                                                                                                       | (ii) | Richard D. Kniss |   |   |
|   |   |                                                                                                                                                                                                                       |   | Votes  for | 135,496,573 |   |
|   |   |                                                                                                                                                                                                                       |   | Votes  withheld | 725,949 |   |
|   |   |                                                                                                                                                                                                                       |   |   |   |   |
|   |   |                                                                                                                                                                                                                       | (iii) | Joerg C. Laukien |   |   |
|   |   |                                                                                                                                                                                                                       |   | Votes  for | 119,161,098 |   |
|   |   |                                                                                                                                                                                                                       |   | Votes  withheld | 17,061,424 |   |
|   |   |                                                                                                                                                                                                                       |   |   |   |   |
|   |   |                                                                                                                                                                                                                       | (iv) | William A. Linton |   |   |
|   |   |                                                                                                                                                                                                                       |   | Votes  for | 135,506,634 |   |
|   |   |                                                                                                                                                                                                                       |   | Votes  withheld | 715,888 |   |
|   |   |                                                                                                                                                                                                                       |
|   |   | (ii)                                                                                                                                                                                                                       | To ratify the selection  of Ernst & Young LLP as the Company’s independent registered public  accounting firm for fiscal year 2009: |
|   |   |                                                                                                                                                                                                                       |   |   |   |   |
|   |   |                                                                                                                                                                                                                       |   | Votes  for | 135,697,509 |   |
|   |   |                                                                                                                                                                                                                       |   | Votes  withheld | 506,505 |   |
|   |   |                                                                                                                                                                                                                       |   | Votes  abstaining | 18,508 |   |

 

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Except as setforth above, there were no shares abstaining and no broker non-voting sharescast.

 
| **ITEM 5.** | **OTHER  INFORMATION** |
|-------------|------------------------|

 

None.

 
| **ITEM 6.** | **EXHIBITS** |
|-------------|--------------|

 
| **Exhibit  No.** | ** ** | **Description**                                                                                                                                                                               |
|------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1             |       | Certification by Chief  Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of  2002(1)                                                                                  |
|             |       |                                                                                                                                                                                          |
| 31.2             |       | Certification by Chief  Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of  2002(1)                                                                                  |
|             |       |                                                                                                                                                                                          |
| 32.1             |       | Certification by Chief  Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.  Section 1350, as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002(2) |

 

----

(1) Filed herewith.

(2) Furnishedherewith.

 

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**SIGNATURES**

 

Pursuant to therequirements of the Securities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned, thereuntoduly authorized.

 
|                        |   | BRUKER CORPORATION |
|-----------------------------|--------|--------------------|
|                        |   |               |   |
| Date: August 10,  2009 |   | By:                | /s/ FRANK H.  LAUKIEN, PH.D. |
|                        |   |               | Frank H. Laukien, Ph.D.  President, Chief Executive Officer and Chairman |
|                        |   |               | (Principal Executive  Officer) |
|                        |   |               |   |
| Date: August 10,  2009 |   | By:                | /s/ WILLIAM J. KNIGHT |
|                        |   |               | William J. Knight |
|                        |   |               | Chief Financial Officer |
|                        |   |               | (Principal Financial  Officer) |

 

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